BUSINESS BEFORE QUESTIONS

New Writ

Ordered,
	That the Speaker do issue his Warrant to the Clerk of the Crown to make out a new Writ for the electing of a Member to serve in this present Parliament for the Borough constituency of Feltham and Heston in the room of Alan Keen, deceased.— (Ms Winterton.)

ORAL ANSWERS TO QUESTIONS

ENVIRONMENT, FOOD AND RURAL AFFAIRS

The Secretary of State was asked—

Common Agricultural Policy

Peter Bone: What recent steps she has taken on reform of the common agricultural policy.

Caroline Spelman: Having just heard the writ being moved, I am sure it would be the right thing to do to express our condolences to Alan Keen’s wife, Ann, whom we all remember, on behalf of the whole House.
	The Government have commenced negotiations on the CAP reform proposals, which the Commission published on 12 October and which, for the first time, require the co-decision of the European Parliament. I recently met Agriculture Commissioner Ciolos, together with the Agriculture Ministers for the devolved Administrations, to ensure that all parts of the United Kingdom are taken into account.

Peter Bone: Our net contribution to the European Union in the last five years of the Labour Government was £19 billion, and in the next five years of this coalition Government it will be £41 billion—an increase of 116%, because Tony Blair gave away Mrs Thatcher’s EU rebate. At the time, he said that our net contribution would not increase because the European Union had promised massive reform of the CAP. Who was lying, Tony Blair or the European Union?

Caroline Spelman: That is precisely why the UK Government have expressed their disappointment that the proposed CAP reforms lack ambition. Although the commissioner correctly identifies food security and climate change as the two key challenges that agriculture faces, I regret that the proposals do not really address the great challenge.
	Therefore, we will seek to improve them to get the best possible outcome for taxpayers, consumers and farmers alike.

Denis MacShane: The Secretary of State will recall that that great European, Socrates, said that a politician who does not know the price of a bushel of wheat should not be in the job. If we got rid of the CAP, we would have to have a BAP—a British agricultural policy. Knowing our farming community—a landowning community—and its control of top Tories, I suggest that the BAP would be far more expensive than the CAP.

Caroline Spelman: I think we are speculating wildly about the future of Europe. My job is to concentrate on getting an improvement in the reforms. It is important to appreciate that the underlying objective of the CAP is to provide good-quality food at a reasonable price. My Department is committed in its business plan priorities to producing more food sustainably, precisely to achieve that objective.

Andrew George: I am sure that the Secretary of State will agree that a primary objective must be a move from market-distorting production supports to supporting public goods, such as the environment and amenity. How much progress does she believe the CAP reforms are making in that direction? How do we ensure that that general direction of progress can be accelerated?

Caroline Spelman: That is a helpful question, as it enables me to share with the House the fact that we are on a journey with these proposals. We welcome the fact that the Commission wants to “green” the CAP. Taxpayers have every right to expect other public goods for the subsidy they provide. We feel that the “greening” proposals also lack ambition, and we want proper recognition of the fact that UK farmers go a lot further than those in a lot of other member states in providing stewardship schemes that make a real difference and provide environmental benefits that address problems such as the demise of species.

Kelvin Hopkins: There is much talk of returning powers from Brussels to this Parliament and the British Government. Would the CAP not be a good policy to bring back to Britain? Could we not subsidise British farmers, even at the current levels, and save billions of pounds from our budget every year?

Caroline Spelman: The nature of the supplementary questions is ranging much wider than the remit of my Department. As I have said, my job at each one of these Council meetings is to get the best possible deal for consumers, taxpayers and farmers in the hon. Gentleman’s constituency. That is my duty.

Dangerous Dogs

Michael Connarty: What recent discussions she has had with the Secretary of State for the Home Department on the consultation on dangerous dogs.

James Paice: My noble. Friend Lord Taylor, who leads on the subject of dangerous dogs in DEFRA, has been working alongside Lord Henley at the Home Office to see how the proposed antisocial measures can be best applied to such behaviour relating to dogs. DEFRA has also been developing proposals on reducing dog attacks and promoting more responsible dog ownership. This is now at an advanced stage and, subject to ministerial clearance, we will be able to make an announcement early in the new year.

Michael Connarty: That is a very helpful reply, because while the Government have been divided on this matter—DEFRA and the Home Office share this responsibility—and dithering, quite frankly, yet another very serious attack on a postman has been reported by the Communication Workers Union. Someone nearly lost most of the fingers on one hand in an attack by a dog, which was clearly vicious, in a private property. We need to deal with that problem quickly because members of the postal services who go into private property must be protected from people who keep vicious dogs.

James Paice: The hon. Gentleman is absolutely right. The issue of dangerous dogs on private land is very important and it is one of the issues we are discussing closely with the Home Office because, as he will know, it would require amendment to primary legislation.

Jane Ellison: Further to that reply, one of the consequences of the dangerous dogs debate has been the stigmatisation of an entire breed, the Staffordshire bull terrier, which makes up a huge percentage of the abandoned dogs that Battersea Dogs and Cats Home takes in and a vast bulk of those that are hard to rehome. Yesterday, Battersea Dogs and Cats Home launched a campaign in Parliament to reclaim the good name of the Staffordshire bull terrier. May I invite the Minister to endorse that campaign?

James Paice: Yes, I am happy to endorse that campaign, having been brought up as a child with bull terriers, as my parents had them—[ Interruption. ] I said “with”, not “by”. I entirely accept my hon. Friend’s contention that the vast majority of that breed are perfectly harmless.

Mr Speaker: Much has now been explained. We are very grateful to the Minister.

Carbon Emissions

Sheila Gilmore: What recent discussions she has had with ministerial colleagues on the introduction of mandatory reporting of carbon emissions by businesses.

Caroline Spelman: I have had recent discussions with ministerial colleagues on the issue and I know that there is a lot of interest in it. There is an appetite in Government for it but, as the House will be aware, any policy has to undergo an impact assessment, which we are in the process of clearing.

Sheila Gilmore: There are only four months until the Government are obliged either to introduce carbon reporting or to explain why they have not. When the
	Members who previously sat on the Opposition Front Bench supported the proposal, they said that it would help economic growth. Why, in the present economic crisis, is it not being pursued more vigorously?

Caroline Spelman: Two things have emerged. We had more than 2,000 replies to the consultation, which showed that carbon is reported in very different ways. One challenge is to find a way in which it can be reported meaningfully so that investors know which company to invest in, because they understand the information they receive. Secondly, the Department for Business, Innovation and Skills is consulting on the content of company accounts—narrative reporting, as it is known. We need to synchronise the issue because carbon reporting would be in a set of company accounts. I perfectly understand the requirements of the Climate Change Act 2008 in that regard.

Mary Creagh: Climate change is the biggest market failure the world has seen and the Secretary of State’s decision on whether to introduce carbon reporting to correct the failure is imminent. That decision is a once-in-a-Parliament opportunity to create green growth and drive the development of low-carbon products and services across UK plc. With youth unemployment at record levels and mandatory reporting supported by Britain’s largest employers, how many jobs does she estimate would be created in the UK’s green economy if it was introduced?

Caroline Spelman: The hon. Lady shares entirely with me an appreciation of how important it is that we make progress in that area. She will have seen how the coalition Government have committed to challenging targets in order to change our economy to a low-carbon basis. In the spirit of being on the same page on this matter, I can say that I am keen to do what I can to transition the economy in that regard. On this specific question, however, I hope that the hon. Lady will appreciate that, as I said in my reply to the hon. Member for Edinburgh East (Sheila Gilmore), we need to synchronise carbon reporting in a way that investors can understand. At the moment, there are different requirements on companies to report in different ways. We need a meaningful measure of carbon reporting in the spirit of achieving that low-carbon economy.

Mary Creagh: The Secretary of State signally failed to answer my question. There is no estimate in the impact assessment of the number of jobs that the new products and services would create. When the global recession struck in 2008, Labour’s future jobs fund created green jobs for young people in wildlife trusts, country parks and green charities across the country, but they are now on the dole. Carbon reporting will help us to move to the low-carbon economy. When did she last sit down with the Chancellor, one to one, to discuss the autumn statement that he will make on Tuesday and how DEFRA will play its part in creating the conditions for green jobs and growth to tackle the crisis?

Caroline Spelman: I do not think it is my job to share in advance with the hon. Lady the content of the autumn Budget statement. As I just said, I share with her the clear vision about opportunities to create jobs if our
	economy is transitioned into a low-carbon economy. If her party felt so passionately about that, why did it not proceed with what she now claims we should be doing during its 13 years in office?

Common Fisheries Policy

Amber Rudd: What recent discussions she has had with her EU counterparts on reform of the common fisheries policy.

Richard Benyon: As the UK fisheries Minister, I continue to have discussions about reform of the common fisheries policy with a wide range of people and organisations. They include the EU Commission, Members of the UK and European Parliaments and ministerial colleagues of other member states, as well as representatives of our fishing and related industries. I will continue to press our case for reform as negotiations develop in the Council and European Parliament.

Amber Rudd: I thank the Minister for that answer. His and the Government’s commitment to sustainable fisheries and sustainable fishing communities is well known and much appreciated. Is he aware of the real anxiety, shock and growing opposition from the smaller fisherman community to the transferable fishing concessions being proposed, given that this has been so damaging to smaller communities?

Richard Benyon: The fish in our seas are a national resource and what we are talking about, in the reform of this failed policy, is getting a fairer system for the allocation of that resource. Transferable fishing concessions in other countries are sometimes a lever towards better conservation, but I reassure my hon. Friend and fishermen in her constituency that we are not happy with the proposal that has been made thus far. We think it requires much more detail and there are certain elements of it to which we are opposed. We will keep her and the House informed at every stage.

Ben Bradshaw: Will the Minister accept that, however the common fisheries policy is reformed, the biggest threat to fish stocks in our waters and internationally is unsustainable commercial fishing? Given that, what is he doing to ensure that all public procurement of fish in this country, including by this place, is from sustainable sources?

Richard Benyon: I am pleased to report, if the right hon. Gentleman has not heard, that the Government are announcing Government buying standards at the highest level, commensurate with the Olympic standard, which is considered to be the relevant level of sustainability. Across Government, we will procure fish only from sustainable sources.

Anne McIntosh: Will my ministerial Friend agree that one of the most exciting aspects of the proposed reforms is regional control? Will he strain every sinew to ensure that we end the exclusive competence of the EU in this regard and allow regional fisheries to control their own waters?

Richard Benyon: I entirely support the words of the Chairman of the Select Committee on Environment, Food and Rural Affairs. We have an opportunity to achieve something that we have failed to do for decades—a system that reflects local needs. It is absurd to have a common fisheries policy that from Brussels sets net sizes for fishing fleets around our coast. We have to have some form of regionalisation. We like the direction that the reforms are taking and we wish to see more detail in the coming weeks.

Dennis Skinner: Is it not remarkable that in the space of a quarter of an hour the Government, who are supposed to be blazing a trail for bringing back things from the common market and the European Union, have already eliminated the repatriation of the common agricultural policy and, according to what the Minister just said, fisheries is not on the agenda, either? Are we not being led up the garden path?

Richard Benyon: It is always nice to hear from the hon. Gentleman with his cheery disposition so early in the morning. He probably did not hear my reply to the previous question, in which I said that we are talking about the repatriation of controls whereby countries around a sea basin will have greater management of our fisheries. The wider question about whether we should have a common fisheries policy at all probably is not for this forum but is, perhaps, for a higher pay grade. He is welcome to take part in the frequent debates that we have in the House on this matter.

Electronic Training Aids (Cats)

Natascha Engel: What her policy is on the use of electronic training aids for cats.

James Paice: DEFRA has neither commissioned nor evaluated any specific research on electronic training aids for cats. DEFRA is currently awaiting the publication and evaluation of recent research on the use of electronic training collars for dogs, before making any decisions on whether to introduce any proposals relating to those devices.

Natascha Engel: I thank the Minister for that answer, because 250,000 cats are killed on the roads every year. Containment fences and electronic devices help to keep cats safe, and they are completely different from the electronic collars used on dogs. Will he guarantee that, when his Department consults on banning the use of electronic collars, he will distinguish between cats and dogs and work closely with the group, Feline Friends, which is based in North East Derbyshire—my constituency?

James Paice: I think I can confirm to the hon. Lady’s satisfaction that we have no plans to do anything about training aids for cats. Indeed, the research on dogs that I referred to relates only to collars, not to what is known as the invisible fence. We therefore have no such proposals.

Tony Baldry: Can my right hon. Friend explain why the Home Office has responsibility for dangerous dogs and he seems to have responsibility for domestic cats?

James Paice: Well, it is probably because, as anyone who knows me will confirm, I am extremely soft and really just a pussycat myself.

Waste Review

Nick Smith: What estimate she has made of the number of green jobs that will be created by implementation of the waste review.

Caroline Spelman: Britain’s waste and recycling sector is valued at more than £12 billion, employs 120,000 to 150,000 people and is forecast to grow by between 3% and 5% per annum over the next seven years. The waste review set us on the path to a zero-waste economy. It will support the sector’s transition from focusing on disposal to landfill to the greater reuse, recycling and recovery of waste material.

Nick Smith: If the Secretary of State adopted a 70% recycling target, as the Welsh Assembly has, an extra 50,000 private sector jobs could be created over the next four or five years. Why does England have a lower recycling target than Wales, Scotland and Northern Ireland? It has the weakest targets in the UK.

Caroline Spelman: As I have explained before, targets in specific areas can play a role in achieving a zero-waste economy, but they can produce perverse consequences. I recently attended the Waste and Resources Action Programme conference, where it was clear that the waste industry feels that one of the things that has driven innovation and change is the landfill tax. There is no question but that the new capacity through new technology to recycle more materials is an engine of growth in the economy.

Jo Swinson: I should like to press the Secretary of State a little further on recycling, particularly on the recycling of packaging, because the Government have been too timid in their packaging recycling targets so far. We have been promised a consultation this year on more ambitious targets from 2013 onwards. We are nearly in December, so will she tell us when that will happen?

Caroline Spelman: I think that the hon. Lady would agree that the Courtauld commitment has helped, through voluntary agreements with different sectors of the economy, significantly to increase recycling targets. We have recently concluded new responsibility deals on packaging with the hospitality and catering sector. As part of that ongoing progress, I remain committed to the Courtauld process further extending into the community, and of course we will consult shortly on new opportunities as they arise.

Gavin Shuker: The incoherence of those two answers serves as testament to the fact that the waste review comes from a Department of missed opportunity. Put simply, green growth creates jobs. The economy is in dire straits. Growth has flatlined; confidence has tanked; and 1 million young people stand unemployed. My question is simple: what will the Secretary of State do about it?

Caroline Spelman: The hon. Gentleman clearly was not listening to the fact that the waste industry is a bright star in the economy, with growth rates of 3% to 5% per annum. One of the reasons the industry is so successful is the constant stream of entrepreneurship and innovation, as we increasingly see waste as resource. There is continuous progress in this area, and I think that he would agree that the landfill tax has been an important regulatory driver in helping to encourage that innovation.

Animal Welfare

Pauline Latham: What discussions she has had with (a) her EU counterparts and (b) ministerial colleagues on the implementation of the welfare of laying hens directive.

Sarah Newton: What discussions she has had with (a) her EU counterparts and (b) ministerial colleagues on the implementation of the welfare of laying hens directive.

James Paice: Discussions at EU level are ongoing, and the UK is fully engaged with the Commission, other member states and the devolved Administrations on finding a practical enforcement solution. We need to protect producers across the EU who will have complied with the ban from unfair competition from those who fail to comply.

Pauline Latham: I thank the Minister for his answer. Does he agree that the concerns of the United Kingdom are being heard because of early representations by this Government? Will he commit to doing the same for our pig farmers, who risk being disadvantaged in the same way by new animal welfare regulations due in 2013?

James Paice: I can confirm to my hon. Friend that it is over a year since we first told the Commission that it was quite obvious that a number of countries would not be able to comply in time. She is absolutely correct that this is a precursor to an even bigger welfare issue: the ban on sow stalls, which comes in on 1 January 2013. If we do not get it right this time, it does not bode very well for 2013.

Sarah Newton: Colin Carter’s Eggs in Perranwell has invested in high standards of hen welfare, and it is understandably concerned, as I am, that cheap eggs—in particular, processed or liquid eggs, which account for 25% of the market—are coming in from parts of the EU that do not have such high standards. What is my right hon. Friend doing to prevent that?

James Paice: As I said in my opening answer, discussions are still going on. There is a further meeting of officials in Brussels next week, and that really is the last chance for the EU to prove that it is serious about improving animal welfare and enforcing its regulations. If, as I fear, no solution comes about next week, I will make an announcement shortly on how we intend to protect our industry.

Pat Glass: My constituent Mr Tulip and his family have spent almost £8 million bringing their farm up to the EU directive level. If the
	meeting next week does not go well, will the considerations include banning eggs from countries that are acting illegally?

James Paice: I fully appreciate that UK producers have invested about £400 million in new systems, and they are entitled to expect others to do the same; that is perfectly reasonable. As for the measures that will be taken if we do not get anywhere in Europe—and I cannot claim much optimism on that front—I will make an announcement shortly. A ban has not been ruled out, but I am sure that the hon. Lady will appreciate that there are some pretty big legal issues here.

Philip Hollobone: Given that the British egg industry has spent some £400 million on meeting the requirements of the EU directive, and countries such as Spain, Poland, France and Italy have done everything to avoid their obligations under the directive, should not the Minister say at the EU meeting that unless the Europeans put the right deal on the table, there will be a British unilateral ban to keep illegal eggs out of other EU countries?

James Paice: My hon. Friend is entirely right. Some 12 member states will not be in full compliance—some to a much greater degree than others—and he is right that Spain and Poland are among those 12. As I say, we have not ruled out a ban. It is important that the other countries—member states that, like us, will have complied, including most of the northern European countries—work together wherever possible to make sure that we have maximum impact when it comes to forcing compliance elsewhere.

Food Manufacturing

Catherine McKinnell: What discussions she has had with the Secretary of State for Business, Innovation and Skills on (a) food prices and (b) support for British food manufacturing.

Caroline Spelman: I have, in the normal course of business, discussed food prices and support for food manufacturing as part of the Government’s growth review, and we continue to work with the Department for Business, Innovation and Skills and UK Trade & Investment to help boost growth, exports and efficiency in the whole food chain.

Catherine McKinnell: I thank the Secretary of State for that answer. Food manufacturing is very important to the north-east, especially to my constituency; firms such as Nestlé, Warburtons and Greggs play a really significant part in the local economy. What specific plans does her Department have, working alongside BIS, to support that vital sector, including through research and development and capital allowances, and by increasing exports, thereby helping to support tens of thousands of jobs in the north-east?

Caroline Spelman: All the firms that the hon. Lady mentions are household names, and indeed the food industry contributes more than £80 billion to the UK economy. As I have said, I have had representatives from the Food
	and Drink Federation and from agri-food businesses in the Department to ask them what we can do to help them remove barriers to growth in trade. I have very good news to report: for the seventh year in a row, UK exports of food and drink have risen.

Tim Farron: Uplands are a vital source of food production in this country, and the Secretary of State will know that they are supported through the uplands entry level scheme. Does she share my concern that money from the scheme is often snaffled by absentee landlords, rather than going to the hard-working tenant farmers who produce the food?

Caroline Spelman: When we announced our £26 million uplands package, one of the things we said we would do is give priority to uplands farmers who want to take up entry-level schemes. We specifically spoke about the need for landlords to back their tenant farmers who want to take advantage of the scheme.

Huw Irranca-Davies: Public procurement is a key way of supporting British food production and high food standards, yet the Department for Work and Pensions sources only 11% of its food from UK producers, DEFRA is failing on its own policy for sourcing sustainable fish and the new ethical standards for food served in public institutions were ridiculed in a report this week for being even weaker than those at McDonald’s. Will the Secretary of State please stop clowning around with food standards and UK food production jobs and at least try to keep up with Ronald McDonald?

Caroline Spelman: There is no question but that the Government, through procurement choices, can make a big difference to the food and drink industry, which is one of the reasons we set additional requirements on all Departments to buy to higher standards, including sustainable fish, when we announced the guidelines for Government buying standards in September. We do not yet have figures for the most recent month, and no doubt it will take time to adapt to the changes, but the point is that there is a commitment right across central Government to buy to the highest standards that we expect from British food producers.

Farm Administration

Simon Hart: What progress she has made in reducing the administrative burden of inspection and regulation on farmers.

James Paice: My hon. Friend and the House will know that the Government attach huge importance to the need to lift the burden of regulation while maintaining standards. On 3 November I announced the publication of the interim response to the independent farm regulation taskforce. We will publish a final response early next year.

Simon Hart: Does the Minister agree that this is all about trust and that, where possible, we should trust our farmers to self-regulate and impose statutory regulations only where absolutely necessary?

James Paice: I entirely agree with my hon. Friend. I am afraid that there appears to have been a view over the years that every farmer was a potential criminal, and farmers felt very disillusioned about that. We believe that the vast majority want to comply with regulations and can be trusted to do so, which is why we are looking at earned recognition so that we can concentrate our resources on the small minority who might not comply.

Jim Sheridan: The Minister will be aware of some initial concerns about additional administrative costs for the farming community following the introduction of the Gangmasters Licensing Authority, which has proved to be really effective and has been welcomed by farmers. Will he assure the House that there are no plans to change how the agency operates or how it is funded?

James Paice: The hon. Gentleman is entirely right. The GLA was set up after the tragic events at Morecambe bay and, to the best of my recollection, was supported by all parties in the House. That work is still extremely important. Discussions are taking place within Government on whether DEFRA is the right place for the GLA, so I cannot give the undertakings he is perhaps demanding, but the existence and purpose of the GLA is absolutely right and will be maintained.

David Ruffley: Suffolk farmers expect this Government to reduce red tape. On the May report of the regulation taskforce, will the Minister tell us what the compliance cost saving will be if his Department delivers all 200 cuts in bureaucratic processes?

James Paice: I am afraid I cannot give my hon. Friend a figure at this stage because we are still developing our final response. We are going through all 214 recommendations and are determined to be bold and ambitious, as we were urged to be by Richard Mcdonald. Much of the cost to farmers is the result not of complying with regulations, but of the bureaucratic burden of the process of complying, and that is what we are trying to address.

Endangered Species

Kerry McCarthy: What steps she is taking to curb the hunting of endangered species.

Richard Benyon: No native endangered species can be legally hunted in England. Although we cannot intervene directly in legal hunts of endangered species allowed by foreign Governments, the UK pushes for international co-operation through the convention on international trade in endangered species—CITES—in order to ensure that any trade in endangered species is sustainable. The UK also strongly supports the International Whaling Commission’s moratorium on commercial whaling.

Kerry McCarthy: Will the Minister therefore join me in condemning the trophy hunting of endangered and vulnerable species such as that carried out by the millionaire banker and Tory donor, Sir David Scholey, who was
	pictured in
	The Sun
	recently, posing by the bloody corpse of a lion under the headline “Who’s the bigger beast?”? Does the Minister condemn that?

Richard Benyon: We recently had a debate in Westminster Hall about lion trophies and importation to the UK. There are certain areas of Africa where lion populations give real cause for concern, and we are working through colleagues in CITES to ensure that the concerns in that debate and throughout the House are raised. Yes, I will condemn any hunting of an endangered species, for whatever reason, if it puts that species at risk, and this Government have responsibility for—

Mr Speaker: We are ever so grateful to the Minister.

James Gray: Does the Minister not agree that one of the best ways to prevent the illegal hunting of endangered species overseas is ever tougher controls on the illegal import of bush meat to the UK? What is he going to do to take that forward?

Richard Benyon: We are very concerned about bush meat and importation, and that is why we have protected funding for the work taking place at ports and airports, and for the expertise that we have, on the matter. There is also a very good case, which we have made in Britain, for being much stronger on the export or import of rhino horn which, as we know, is putting that species at very severe risk of extinction.

Topical Questions

Philip Hollobone: If she will make a statement on her departmental responsibilities.

Caroline Spelman: My Department takes responsibility for safeguarding the environment, supporting farmers and strengthening the green economy. In that context, I will attend important climate change negotiations in Durban next week. The items on the agenda include sustainable agriculture, as well as the protection of international forestry. In addition, I will have a series of bilateral discussions as part of the preparations for Rio plus 20, on which I will lead, and, of course, update the House on my return.

Philip Hollobone: Farmers in the Kettering constituency continue to complain about the difficulties that they encounter in obtaining their single farm payment, especially where there have been changes to farm boundaries. I know that much has been done to sort out the Rural Payments Agency, but what more can be done to sort out that wretched organisation?

Caroline Spelman: As I am sure the whole House is aware, the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire (Mr Paice) has been working hard to improve the performance of the Rural Payments Agency, and there is indeed a strategic improvement plan to help achieve that. The target was met in June for payments, and we are making good progress towards achieving the target that is required to be met by the end of this year.

Julie Hilling: The Wildlife Trust for Lancashire, Manchester and North Merseyside is concerned about the future funding of higher-level stewardship on the west Pennine moors and the Red Moss site of special scientific interest, which are both in my constituency. What assurance can the Secretary of State give that she will secure funding and not be out-negotiated by the French, or by the Treasury?

James Paice: I am grateful to the hon. Lady for that question, because we are very conscious that the uncertainties of the EU proposals on common agricultural policy reform are causing some landowners and farmers to worry about their stewardship payments. May I, though her and the House, assure everybody involved that the Government are determined to continue with our stewardship schemes, both higher level and entry level, and will do everything in our power to ensure that that happens? We are at an early stage of the negotiations, but we are determined that somehow—either through a transfer of money from pillar one to pillar two, or perhaps through the greening element of pillar one—we shall maintain those excellent schemes.

Jeremy Lefroy: What discussions has my right hon. Friend had with Latin American colleagues to prepare for the forthcoming international conferences in Durban and Rio?

Caroline Spelman: I have had two in particular. I met Brazil’s Environment Minister, Izabella Teixeira, during negotiations in Nagoya, and as Brazil is the host nation I went down there to help the Brazilians with preparations for Rio plus 20 next year, and most recently, as the House will be well aware, we had a visit from the Colombian President and the Environment Minister, Frank Pearl, whom I met at the Department with a proposal for sustainable development goals, to which we have given our support in principle.

Thomas Docherty: When the Government’s long overdue water White Paper finally comes out, will the Secretary of State confirm that small businesses, not fat cat water utilities, will be at the centre of deregulation?

Richard Benyon: The water White Paper will be published in the next few weeks. It will set out a way forward for the water industry that will encourage new entrants.

Bob Blackman: Currently we pay our farmers not to grow crops, but at the same time the world population is growing, and half the world is in need of food. What will my right hon. Friend do to end that scandal, so that our farmers can get back to what they do best: growing crops for this country and for the rest of the world?

James Paice: I hesitate to challenge my hon. Friend, but that waste stopped four or five years ago. We no longer have set-aside. The worry now is the Commission’s proposal effectively to reintroduce a 7% set-aside as
	part of the ecological focus areas that the Commissioner proposes. We do not believe that that is the right way forward. We have to produce more food, but we must do so sustainably. As my right hon. Friend the Secretary of State said earlier, we are sorry that the proposals, so far, do not meet that challenge.

Grahame Morris: May I draw the Minister’s attention to early-day motion 2273 in my name, which has attracted more than 60 signatures from Members of all sides of the House and calls for the implementation of mandatory CCTV in UK slaughterhouses? It is disturbing that around 90% of cases of animal cruelty in UK slaughterhouses do not result in a successful prosecution. Will the Minister consider introducing a pilot scheme to trial such an approach?

James Paice: Animal Aid believes that around 70% of slaughterhouses already have CCTV. Regarding the recent, quite proper, furore over cruelty to pigs at what was then called Cheale Meats, it is important to point out that CCTV cameras were there—albeit perhaps pointed in the wrong direction—so they are not the final panacea that some people believe them to be. Nevertheless, we are considering them as part of a wider-ranging package to ensure that there is no cruelty to animals in those last few moments of their lives.

Tessa Munt: Does the welfare of laying hens directive present an opportunity for us to support our farmers and food producers through country of origin labelling and information on compliance suppliers and sources of egg? Will the Minister have discussions with supermarkets and other retailers on egg products, liquid and powder egg, and prepared foods, so that it is easy to buy good eggs?

James Paice: I can assure my hon. Friend that I have had such discussions and will continue to have them. I can assure the House that overall, the supermarkets, and indeed much of the processing sector, are determined to comply with the spirit of the legislation and procure egg and egg product only from compliant cages. As I said, I may well make a further statement shortly.

John Cryer: The Minister has consistently said that the review of the common fisheries policy is a golden opportunity, and he has said the same again today. Will he therefore make a promise to the House that the British fishing fleet will be larger at the next election than it was at the beginning of this Parliament?

Richard Benyon: That would depend on there being more fish to catch. What we seek to achieve through a proper reform is conservation measures that we can manage much closer to home, which can lead to a recovery in fish stocks and therefore an increased opportunity for our fishing fleet. I want to see a reform of common fisheries policy that means that the sons and grandsons of fishermen can see a future, because they cannot at the moment.

Dominic Raab: Mandatory greening under new CAP reform proposals would remove a fifth of land on higher-level stewardship farms from
	food production. What representations has the Secretary of State made to the EU Agriculture Commissioner about the damaging impact that that would have on food security in this country?

James Paice: My hon. Friend is right to be concerned about that. As my right hon. Friend the Secretary of State said earlier, we met the Commissioner only 10 days ago and impressed on him the fact that the proposals were not in accordance with the challenges of global food demands in the coming years. I can assure him that we are not a lone voice. Listening to the voices around the Council table reveals that the vast majority of Ministers are opposed to taking further land out of production.

Graeme Morrice: Business groups have warned that the Government’s decision to delay the establishment of marine conservation zones will impede investment in marine industries, including renewable energy and sustainable fishery projects. Does the Secretary of State agree?

Richard Benyon: We are progressing the implementation of an ecologically coherent network of marine conservation zones, which have to be sustainable in every sense. That means that they have to be able to withstand any challenge that may be put to them, legal or otherwise, so we need to get more evidence for some of them. I can assure the hon. Gentleman that this Government remain absolutely determined to take this forward, but we need to get it right. If that means we have to take a month or two longer—or six months longer, to be perfectly accurate—that would be a better way than getting it wrong.

Neil Parish: This week has seen the launch of the ecosystems market taskforce. What are the practical implications of that?

Caroline Spelman: That is one of the commitments that we gave in the natural environment White Paper. We have asked Ian Cheshire, the chairman of Kingfisher Group, to chair the ecosystems taskforce, together with a number of business leaders and scientists. This is an opportunity to help business in this country to take the chance, with the new green technologies and green growth, to grow our economy into a low-carbon economy, and beyond that, towards all the opportunities that realising the true value of natural capital can provide.

Mark Lazarowicz: Will the Secretary of State give an update on the progress being made by her Government to tackle international speculation in food commodities? That is a major factor in driving up food prices, which is affecting our constituents and others internationally, and it needs to be tackled as a matter of urgency.

Caroline Spelman: The evidence regarding the role of speculation in the rise of food prices is perhaps not as clear as the hon. Gentleman sets out. The main reason for volatility in prices is that supply and demand are tight, and the best way to address that is to improve the supply of food to the market. Transparency is the key to helping to reduce volatility. We, as a Government, support greater transparency so that people around the world know who is producing what, where, and how much they have in stock. That will help to buffer prices.

Roger Williams: The six-day movement rule and the ban on on-farm burial are particularly burdensome to livestock farmers. Since their introduction the scientific understanding of these matters has moved on. Will the Minister commission a scientific review of the regulations with a view to their relaxation?

James Paice: Both issues appear in the Macdonald report, to which I referred earlier and to which we will be responding early in the new year. The burial of dead animals, in particular, is controlled at EU level, and it is not entirely within this Government’s gift to change the rules.

CHURCH COMMISSIONERS

The hon. Member for Banbury, representing the Church Commissioners, was asked—

Civil Partnerships

Ben Bradshaw: What the authority is for the policy of the Church of England that services of blessing should not be conducted in church premises for those who register civil partnerships.

Tony Baldry: In its pastoral statement of July 2005, the House of Bishops affirmed that clergy of the Church of England should not provide services of blessing for those who register a civil partnership. The Church of England’s response to the Government’s consultation document on civil partnerships on religious premises, which was produced earlier this year, reflected that policy and was approved by the Archbishops Council and by the Standing Committee of the House of Bishops.

Ben Bradshaw: I am grateful for that reply. Given that when the law changes to allow civil partnerships to be conducted on religious premises many Church of England priests and parishes will want to conduct such ceremonies, would it not be better for the Church of England to do what it did when it first allowed the remarriage of divorcees in church, and allow individual priests and parishes to make the decision?

Tony Baldry: In fairness, I would contend that the Church of England, led by its bishops, has to be free to determine its own stance on matters of doctrine and ethics. The Government have said that the new option to register civil partnerships in places of worship must be entirely voluntary. That means that those who think that the Church of England should opt in need to win the argument within the Church.

Church Tourism

Laura Sandys: What steps the Church Commissioners are taking to promote church tourism.

Tony Baldry: I was delighted recently to visit with my hon. Friend some of the historic churches in her constituency. As she is aware, the General Synod passed
	a motion encouraging all dioceses to support church tourism and to link with the wider national church tourism strategy. The Church is working closely with its entire group of dioceses and with the Churches Tourism Association to assist local churches in encouraging visitors, especially in the run-up to the Olympics, the diamond jubilee and Open Churches Sunday.

Laura Sandys: I thank my hon. Friend for his trip to my constituency to see some of the wonderful churches in east Kent, which are great tourist attractions. Is he able to introduce me to the people who run tourism at Canterbury cathedral, which attracts hundreds of thousands of visitors? They might be able to do more to move some of those tourists to other beautiful churches in east Kent.

Tony Baldry: My hon. Friend makes an extremely good point. Our cathedrals attract thousands of visitors each year. We need to encourage those who visit cathedrals such as Canterbury to visit the many fantastic churches full of history and heritage in the surrounding areas, such as those in my hon. Friend’s constituency.

PUBLIC ACCOUNTS COMMISSION

The Chairman of the Public Accounts Commission was asked—

National Audit Office

Barry Sheerman: What recent discussions the Public Accounts Commission has had on ways in which the National Audit Office can be made more effective and efficient.

Edward Leigh: The Public Accounts Commission discusses the NAO’s use of resources twice a year. Last November we endorsed its strategy for the three years from April 2011, which included plans to save 15% in nominal terms—21% in real terms—over that three-year period. The commission looked at the NAO’s efficiency gain in March when we examined its draft estimate. The commission will next meet on 7 December to consider the NAO’s proposed resource requirements for the three years starting in April 2012.

Barry Sheerman: Have the hon. Gentleman and the commission considered introducing the same sort of reforms that the Government have produced for the Audit Commission? Has he considered using the big five private accountancy firms more widely, or has he learned some lessons from the disaster that is the Audit Commission reform?

Edward Leigh: All that has happened so far—we will discuss this at our meeting on 7 December—is that the Government have proposed that the NAO take over from the Audit Commission solely responsibility for the preparation and maintenance of the code of practice, which sets a framework for the audit of local bodies, together with associated guidance for local auditors. The NAO will also be able, when reporting to Parliament on the activities of central Departments, to examine the
	impact of policies administered by local bodies. The NAO is making preparations for those potential areas of work. We will give it sufficient resources to enable it to do that work responsibly and properly.

Anne McIntosh: When the National Audit Office produces excellent reports, such as the recent report on flood defences, would my hon. Friend consider allowing the Select Committees concerned to debate their contents and conclusions, rather than just the Public Accounts Committee?

Edward Leigh: My hon. Friend makes a good suggestion. She knows that I was, in a previous incarnation, Chairman of the Public Accounts Committee. We were keen, and remain keen, for the National Audit Office to extend its work so that it reports not just to the Public Accounts Committee but to all Select Committees. I am happy to take her suggestion back to the National Audit Office.

Mr Speaker: The hon. Gentleman is underselling himself. He served with great distinction as Chairman of the Public Accounts Committee for two Parliaments.

CHURCH COMMISSIONERS

The hon. Member for Banbury, representing the Church Commissioners, was asked—

Food Banks

Andrew Selous: What steps the Church of England has taken to support food banks.

Tony Baldry: The Church is heavily engaged in food banks across the country. There is a national network of food banking centres in towns and cities. Food banks give out nutritionally balanced emergency food to people in crisis. Food banks also offer additional support to put people in touch with relevant agencies that can offer further support.

Andrew Selous: In South West Bedfordshire, churches in Dunstable and Houghton Regis have just agreed to set up a food bank, and churches in Leighton Buzzard run a homeless service. Churches in those towns also support street pastors. Churches throughout the constituency are taking part in the “Let’s Stick Together” initiative run by Care for the Family. Does my hon. Friend agree that that is an amazing record of achievement in contributing to our local community?

Tony Baldry: I hope that churches across the country will seek to engage with and support their local communities whenever they can. The churches that my hon. Friend cites in his constituency are an excellent example. Local churches can support food banking in several ways, including through the direct giving of food donations, and through volunteering and working where necessary to step in to assist those in need. I hope that we can do that right across England.

Kerry McCarthy: Will the hon. Gentleman join me in congratulating the Bishop of London on his support for the “Feeding the 5,000” event in Trafalgar square last Friday? That organisation looks at how we can use the phenomenal amount of food that goes to waste in this country to feed people who are in food poverty.

Tony Baldry: The Bishop of London’s leadership on that initiative is excellent, and it is an excellent initiative.

Church Buildings (Theft)

George Hollingbery: Whether the Church Commissioners have considered English Heritage’s guidance on (a) theft of metal from church buildings and (b) replacing lead with modern materials.

Tony Baldry: The theft of metal from churches continues to be a very serious problem. About 10 churches a day suffer from theft. Insurance payouts for the theft of metal from places of worship have increased by 70%, and according to the Association of Chief Police Officers, the full cost of metal theft to the domestic economy across all sectors is upwards of £770 million.

George Hollingbery: The latest English Heritage guidance note on the theft of metals from church buildings states that
	“support for the use of…non-traditional materials…would be exceptional.”
	However, the guidance note on solar panel installations is relatively liberal. Does my hon. Friend agree that it is hard to reconcile the two, and does he understand why Hambleside Danelaw, an alternative roofing manufacturer in my constituency, is clear that the guidance is not in the interests of churches, their congregations or the wider good?

Tony Baldry: On the substantive issue of the theft of lead, the Church remains convinced that making cash scrap metal transactions illegal is the single move that will have the greatest impact on reducing that crime, and it is pleased to see that proposal gaining wider acceptance. Indeed, my right hon. Friend the Prime Minister said yesterday that the answer
	“lies in looking at how the scrap metal market is currently regulated.”—[Official Report, 23 November 2011; Vol. 536, c. 296.]
	I undertake to investigate in detail my hon. Friend’s specific point about Hambleside Danelaw, and I shall write to him.

James Gray: Is my hon. Friend aware that one of the greatest tragedies about the loss of metal from war memorials, whether they be on Church property or elsewhere, is that there is currently no central record kept of the people whose names are recorded on them? Will he undertake to ask the Church Commissioners to work with the Imperial War museum, and indeed the Ministry of Defence, to provide a central register of those whose names appear on war memorials?

Tony Baldry: I would hope that in the run-up to 2014 to 2018, the centenary of the first world war, churches across the country will not only work on updating,
	conserving and repairing war memorials but give thought, as many communities are, to updating the records of those who lost their lives in the first and second world wars. The theft of inscriptions from war memorials is a detestable offence, and a further example of the need to tackle the theft of metals as urgently as possible.

Christians (Pakistan)

Andrew Stephenson: What support the Church Commissioners are providing to Christians in Pakistan.

Tony Baldry: The Church of England is very aware of the issues facing the Christian community in Pakistan. Two dioceses in the Church of England have strong diocesan links in Pakistan, the diocese of Manchester with Lahore and the diocese of Wakefield with Faisalabad. Four members of the Manchester diocese are currently visiting Pakistan. The Archbishop of Canterbury’s Pakistan focus group was formed in 2006 to keep him informed of issues of significance in relation to Pakistan, to assist him in representing his views appropriately in Pakistan, England and elsewhere, and to maintain positive relations in support of the Church of Pakistan.

Andrew Stephenson: I thank my hon. Friend for that full answer. What initiatives have been taken to increase awareness among Pakistani-background Christians and Muslims in the UK of how they can support inter-faith religious harmony?

Tony Baldry: The Archbishop of Canterbury is very much concerned about the importance of good relations among Pakistani-background Christians and Muslims in this country. When Christian leaders from Pakistan visit the UK they are introduced to prominent Pakistani-background Muslims so that they are aware of the situation, and to encourage them to use their influence and contacts in Pakistan to support persecuted religious communities. The Church of England sent a delegation of both Christians and Muslims from the UK to Pakistan in 2009 on the invitation of the Government of Pakistan, to visit Christian and Muslim community leaders, Government Ministers and officials.

Women and the Episcopacy

Diana Johnson: What assessment the Church Commissioners made of the number of dioceses which have voted in favour of the proposed legislation on women and the episcopacy.

Tony Baldry: The result of the reference of the draft legislation to the dioceses was that out of a total of 44 dioceses, 42 approved of women and the episcopacy.

Diana Johnson: How will the exceptional level of support from both the laity and the clergy be reflected in the passage of the legislation through the House?

Tony Baldry: I think that it is clear that there is overwhelming support for women bishops. The outcome of the recent vote in the dioceses will be reported formally to the General Synod in February, following which it will be asked to approve any necessary final
	adjustments to the drafting of the legislation. I certainly hope that during the lifetime of this Parliament it will be possible for me to bring forward a Measure to the House so that we can approve women bishops in the Church of England.

St Paul’s Cathedral (Demonstrations)

David Winnick: What discussions the Church Commissioners have had on the effects of demonstrations outside St Paul’s Cathedral.

Tony Baldry: I understand from the Bishop of London and the chapter of St Paul’s cathedral that they are in daily contact with the City of London corporation and the City of London police, as well as with the protestors. The chapter of St Paul’s and the Church are committed to working towards peaceful solutions with the protestors and the authorities concerned.

David Winnick: Would not that be the best way, to have a continued dialogue, bearing in mind the fact that many if not all of the demonstrators and the people who have set in—I have visited them—feel very strongly indeed about the growing inequality of wealth in our country?

Tony Baldry: I hear what the hon. Gentleman says. Those concerns have been well reflected by the comments made by the dean and chapter of St Paul’s.

Julian Smith: The London demonstration seems to be adding to an air of tension between Church and state, and there are other examples of bishops becoming much more involved in Government policy. What role can my hon. Friend play to calm that quite worrying situation?

Tony Baldry: My hon. Friend must remember and recognise that both archbishops and a number of bishops
	are Members of the other place: they are Members of Parliament and are entitled to have their views heard. I would suggest that every archbishop and diocesan bishop is a significant leader within their community. They are entitled to speak out and be heard by the country and the House. The Church of England is a national church and the bishops are part of the national voice of this country.

2012 Olympics

John Mann: How many churches plan to hold community celebrations for the London 2012 Olympics.

Tony Baldry: The ecumenical organisation More than Gold has been set up to help churches to engage with the Olympics. There are more than 400 Church of England More than Gold champions, which means that more than 400 churches are already organising activities using More than Gold resources.

John Mann: Would it not be appropriate for churches across the country to follow the magnificent lead of the joint churches in Bassetlaw, who are at the heart of preparing Olympic participatory activities, and are inviting the community into church grounds so that the Olympics can be fully and actively celebrated?

Tony Baldry: That is a fantastic example by the church in Bassetlaw, and I hope that every church will replicate it in all sorts of ways, such as by providing volunteers for the Olympics and hospitality programmes, hosting one of the many mission teams that are coming from overseas to help to give extra impact to activities, and linking hands with other churches to run community festivals and hospitality centres. I very much hope that every church in England will consider how they can use the Olympics as an opportunity to engage with the wider community.

Business of the House

Angela Eagle: Will the Leader of the House give us the business for next week?

George Young: The business for the week commencing 28 November will be:
	Monday 28 November—General debate on political developments and security in the middle east, north Africa, the Sahel, and the horn of Africa.
	Tuesday 29 November—My right hon. Friend the Chancellor of the Exchequer will make his autumn statement, which will be followed by consideration of Lords Amendments to the London Olympic Games and Paralympic Games (Amendment) Bill, followed by consideration of Lords amendments to the Terrorism Prevention and Investigation Measures Bill, followed by consideration of Lords amendments to the Public Bodies Bill [Lords], followed by a motion relating to national policy statements relating to ports.
	Wednesday 30 November—Opposition day (un-allotted day). There will be a debate on an Opposition motion. Subject to be announced.
	Thursday 1 December—Motion relating to BBC cuts, followed by a general debate relating to debt advice and debt management services. The subjects for these debates were nominated by the Backbench Business Committee.
	The provisional business for the week commencing 5 December will include:
	Monday 5 December—Business to be nominated by the Backbench Business Committee.
	Tuesday 6 December—General debate on the economy.
	Colleagues will also wish to be reminded that the House will meet at 11.30 am on Tuesday 29 November.

Angela Eagle: I should like to begin by paying my own tribute to Alan Keen, whose death was announced to the House this week. He was a dedicated champion of his constituents. Many of us have happy memories of Alan, especially of the Tea Room football banter that we all shared with him. My thoughts go out to his wife Ann and the family at this very difficult time.
	Mr Speaker, this week you let it be known in no uncertain terms that the leaking in advance of statements is a gross discourtesy to the House. On Monday, you warned the Secretary of State for Communities and Local Government about the disclosure of his housing statement in the weekend papers. Less than 48 hours later, not only was the Government’s energy statement leaked, but the fact that there was to be a statement at all was tweeted to the world half an hour before the Secretary of State could be bothered to inform his opposite number or the House. Can we now take it that it is the Government’s intention to replace the Order Paper with the Twitter feed of The Guardian? Does the Leader of the House deplore this behaviour, and will he give me a personal assurance that it will never happen again?
	On housing, the Government’s rushed-out PR blitzkrieg on Monday came the day before official figures, which they will have seen, showed a complete collapse of
	housing starts across Britain from 32,000 to just 454 across the entire country. In my own region of the north-west, not one single housing start was made. Monday’s cynical choreography was clearly designed to bury bad news. May we have a proper debate on the worsening housing crisis now that the full facts of the Government’s failure have been revealed?
	Two weeks ago the right hon. Gentleman was kind enough to tell me that
	“the Queen’s Speech will be held in May to coincide with the fixed election dates”.—[Official Report, 10 November 2011; Vol. 535, c. 454.]
	But last week his counterpart in the other place, Lord Strathclyde, seemed to contradict him by saying that it could be in April. That is despite Government undertakings given by Lord Wallace during the passage of the Fixed-term Parliaments Bill that there would be a fixed day in May for the Queen’s Speech. Based on these assurances, Labour peers withdrew an amendment to the Bill which would have set the Queen’s Speech in May after local elections. Will the Leader of the House now clear up the chaos between the Government Front Benchers in the two Houses? Will he confirm that it is not his intention to stage the Queen’s Speech just ahead of election purdah? Surely he has no desire to put Her Majesty in an invidious position by using her in a politically partisan pre-election stunt in her diamond jubilee year?
	Every week demonstrates that the Government’s economic policy is hurting but not working. The Office for National Statistics revealed a 3.5% real-terms fall in average incomes, while chief executives and directors enjoyed a 15% increase in median earnings this year alone. Meanwhile youth unemployment passed 1 million, showing the brutal price our young people are paying for the Government’s failed choices on the economy. Long-term youth unemployment has risen 77% since the Government scrapped the future jobs fund. As the economy continues to flatline, instead of Government action all we are hearing from the Prime Minister is his latest list of excuses. Last year it was the snow, this year it has been the royal wedding, civil servants, trade unions and employment rights—and now it is the eurozone. The Prime Minister is like an Eton schoolboy, facing rustication by his headmaster, who will say anything and blame anyone rather than take responsibility for the consequences of his actions. Will the Leader of the House now admit that these policies are not working and urge the Chancellor to announce an economic rethink that puts jobs first in next week’s autumn statement?
	In opposition, the Prime Minister said that lobbying was the next big scandal waiting to happen, but after 18 months and the loss of a Cabinet Minister there is still no sign of the promised register of lobbying interests. Today there are disturbing reports that Ministers’ spouses and partners will remain free to lobby the Government for private companies under any new rules. This week, it was also revealed that a serving Conservative peer and ex-Chief Whip has been appointed UK representative for the Cayman Islands in order to oppose any further regulation of offshore tax havens. Will the Leader of the House tell us when the Government propose to address the increasingly urgent need for tough regulation in this area, and what is the Government’s position on serving Conservative peers lobbying against regulation of tax havens?

George Young: May I begin on a consensual note and endorse every word that the hon. Lady said about our former colleague Alan Keen? Our thoughts are very much with Ann and the family at this difficult time for them.
	On the statements and announcements earlier this week, my right hon. Friend the Secretary of State for Communities and Local Government, in response to a point of order, explained the background to what happened on Monday. Inevitably, as a background to the housing statement, other organisations were involved and their consent was needed to make the statement. Therefore it was more difficult—although equally essential—for the Government to maintain strict confidentiality about the announcement. I confirm that I deplore any leaking of statements that should be made first to the House and I am happy to remind my colleagues of the ministerial code and what is expected by you, Mr Speaker.
	We inherited a deplorable housing position. The outgoing Government admitted that they did not give it the priority that it deserved. I hope, therefore, that the hon. Lady will welcome the initiatives announced on Monday by my right hon. Friend the Minister for Housing and Local Government to kick-start the housing market, to get public land into play and to make it easier for first-time buyers to buy their first home.
	On the date of the Queen’s Speech, I said on 10 November:
	“The Queen’s Speech will be announced in the usual way.”—[Official Report, 10 November 2011; Vol. 535, c. 454.]
	I am not in a position to confirm a specific date—as the hon. Lady knows, it is subject to progress in another place—but I can confirm that all constitutional proprieties will be observed come the state opening of Parliament.
	The hon. Lady did not remind the House of what action the Labour party took to deal with executive pay and the widening differential between executive pay and average pay, to which I referred at the last business questions. As she will know, we are consulting on the matter—consultation ends tomorrow—and we welcome the High Pay Commission’s contribution. We are consulting on shareholder votes on executive pay, reforming remuneration committees, including the possibility of an employee representative, greater transparency and a much stronger link between pay and performance.
	I was amazed that the hon. Lady had the nerve to mention lobbying. The outgoing Labour Government refused to implement a Select Committee recommendation of a statutory register of lobbyists. In the coalition agreement, we committed to introducing that register, and consultation on the proposals will begin shortly. We would welcome any advice that she might have.
	Finally, the hon. Lady mentioned the economy. I was interested to read that apparently the Leader of the Opposition will say today:
	“The biggest economic gamble in a generation has failed”.
	I agree, and I am glad that he has seen the light. It was the reckless gamble that he and the shadow Chancellor took in the last Parliament that got us into this mess—borrowing beyond our means, claiming to have abolished boom and bust and completely failing to regulate the banks properly. Now they want to increase the deficit by more than £20 billion. It is their economic strategy
	that has failed the country—it is no wonder that the shadow Chancellor, by his own admission, is often to be found in tears.

Several hon. Members: rose —

Mr Speaker: Order. As usual, there is extensive interest. However, Backbench Business Committee business is to follow, and it is important that we allow adequate time for that. Brevity is therefore of the essence—and we will be led in that important exercise by Karen Bradley.

Karen Bradley: May we have a debate on the Work programme and the successes on the ground? Last month, I met Staffordshire Moorlands community and voluntary services, which had taken on 56 of the most-difficult-to-place individuals and had already found full-time work for four and part-time work for two. It would be useful for colleagues to share these on-the-ground success stories.

George Young: I would welcome such a debate. It might be possible to have one after the autumn statement if there is a debate on the economy. I welcome the involvement of the voluntary sector in the Work programme. Citizens Advice, Mencap, the Prince’s Trust and Action for Blind People will be involved in delivering the Work programme and helping to find sustainable long-term jobs for those currently out of work.

Jack Dromey: On Monday, the Prime Minister promised a housing revolution. On Tuesday, the shocking statistics were released showing a 99% collapse in the building of affordable homes and homes for social rent. The code on the release of official statistics states that statistics should be released in a way that “promotes trust”. May we have a statement to the House on whether the Prime Minister, the Deputy Prime Minister and the Minister for Housing and Local Government knew of those shocking statistics before on Monday offering the latest false dawn to the people of England?

George Young: The statistics to which the hon. Gentleman refers were put out by the Homes and Communities Agency on a date arranged some time ago, and it would have been wrong—it would have breached the code of practice on statistics—for any Minister to have referred to them on Monday.

Bob Russell: Signs near motorway service stations read “Tiredness Kills. Take a Break”, yet parking companies are driving motorists back on to the motorways in contravention of those signs. Is it really the role of the state, through the Driver and Vehicle Licensing Agency, to assist private parking firms that are at the limits of legality? May we have a debate on the matter? Perhaps the Home Affairs Select Committee could also investigate these rogue parking companies.

George Young: I understand my hon. Friend’s concern. I hope he recognises that those signs perform a useful purpose in promoting safety on motorways by encouraging people to take a break rather than carry on driving. If there were any unauthorised benefit from those signs of the type that my hon. Friend has described, I would of course be happy to take it up with the Secretary of State for Transport.

Tom Watson: The Metropolitan police have just announced that they have arrested their first suspect in computer hacking. This marks phase 2 of the hacking scandal. Does the Leader of the House think that there might be merit in having a debate, which would allow us to test the remit of the Leveson inquiry to see whether it is wide enough to incorporate this new sinister development as well as look at the recent revelation that the Mulcaire evidence file contains a suggestion that intelligence service profiles were part of his information?

George Young: I am grateful to the hon. Gentleman for that information. If there has been an arrest, he will understand the difficulties of debating matters relating to it in this Chamber. He will know that the Leveson inquiry is sitting at this moment, looking at these issues, as is the Culture, Media and Sport Committee. I hope that there will be adequate opportunities—both in the House and outside it—to pursue the agenda to which the hon. Gentleman refers.

Peter Lilley: Will the Leader of the House grant us a debate as soon as possible on the United Nations Intergovernmental Panel on Climate Change in the light of its recent report suggesting that the extreme weather events we were previously promised may not occur for another two or three decades and the release of several thousand more e-mails from the East Anglia university climate research unit showing that many scientists are privately lukewarmists rather than alarmists about the climate but are afraid to say so in public? Secondly, the IPCC system is being systematically abused and Government officials have been urging scientists to come out with evidence biased in the direction of alarmism lest the Government appear foolish—

Mr Speaker: Order. This is an abuse. The right hon. Gentleman is an immensely senior Member. He had heard my exhortation to brevity and wilfully defied it. It really will not do.

George Young: I understand my right hon. Friend’s strong views on this subject. He will know that a statement on related issues was given yesterday by the Secretary of State for Energy and Climate Change when there might have been an opportunity for him to amplify his views. I cannot promise a debate in the short term, but I hope my right hon. Friend is successful in applying for a debate on this important subject in Westminster Hall or on the Adjournment.

Ann Clwyd: The independent commission on and inquiry into the events that took place in Bahrain earlier this year was published yesterday. It shows what we all suspected and have heard about over the last few days—that psychological and physical abuse and torture took place there. In Mondays’ debate, will the Foreign Secretary indicate the response of the Foreign and Commonwealth Office to this very good report?

George Young: I am grateful to the right hon. Lady for bringing to the House’s attention this important report and what it says about the abuses and atrocities she mentioned. As she says, there will be a debate on
	Monday, and I will ensure that the Foreign Office Minister who handles the debate comes fully briefed to deal with the specific point that the right hon. Lady has raised.

Bernard Jenkin: Do the Government think that the European Union summit at the end of next week is of such little consequence that it does not require any discussion before it takes place? Does my right hon. Friend recall that there used to be a regular debate before each European summit? Why has that practice been abandoned? Do the Government think that nothing of consequence will be discussed at the summit?

George Young: The practice has been abandoned because of paragraph 145 of the Wright Committee report, which specifically mentioned the two pre-European Council debates that formerly took place in Government time. The Wright Committee recommended that that debate and the other set piece debates should be transferred to the Backbench Business Committee along with the time in which those debates took place. That has now happened. My hon. Friend should go to the Backbench Business Committee with his request for a debate on this particular matter. I have to say to him that it is not as though we have not debated Europe in this Chamber: we had a debate on the petition on the referendum; we had a motion to approve the budget on 8 November; we had a motion on Croatia on Tuesday; and we had a general debate on the UK chairmanship of the Council of Europe. It is not the case that these important issues have gone by default in the Chamber.

Pete Wishart: Yesterday the Scottish Parliament discussed the Act of Settlement, and there was broad and overwhelming agreement that the discrimination against Catholics must come to an end. When the Government consider sexual equality and the succession, will the right hon. Gentleman ensure that the House gets the opportunity to debate this ongoing discrimination against Catholics?

George Young: As the hon. Gentleman knows, there will be a Bill on the royal succession, and I hope it will be possible to debate the important issues he has just raised in that context.

David Nuttall: May we have a debate on the increasing level of crisis in the eurozone, following the news that yesterday even Germany, which everyone was hoping was going to bail out the eurozone, was able to find buyers for only two thirds of its debt bonds for the first time since it scrapped the Deutschmark and adopted the euro?

George Young: My hon. Friend raises an important issue. The Government receive a wide range of advice on a number of matters, including the international economic situation and outlook. A range of contingency plans are in hand. It would be inappropriate to comment on what may or may not happen, however, or on the detail of that advice.

Stephen McCabe: Two weeks ago we learned that the Home Secretary had ordered a secret pilot that left our borders unprotected.
	This week we learn that French company Eamus Cork Solutions, famed for sleeping guards and letting detainees wander off, has been given a contract to protect our borders, and the Government now want, at huge cost to the taxpayer, to fly volunteers in from Russia, South Africa and India to cover our borders. May we have a debate on the effectiveness of this Government’s UK border controls?

George Young: As the hon. Gentleman will know, the Select Committee on Home Affairs is currently conducting an inquiry into precisely the issue he raises. We take border control seriously. We are introducing a UK border agency. The situation we inherited from the outgoing Labour Government was less than satisfactory, and we are now putting the deficiencies right.

Gareth Johnson: Given that striking public sector workers will in effect be saying next week that the rest of us should pay more tax to support their pensions, may we have a debate in Government time on their premature and irresponsible actions?

George Young: I endorse what my hon. Friend says about the impact of this strike. I hope that, even at this relatively late moment, many of those who are contemplating striking will not do so, as a strike would have a damaging impact on the economy. Negotiations on the pension deal are continuing. It is my view—and, I think, the view of many in this House—that it is a generous offer, striking a fairer balance between taxpayer and public sector employee. The best thing that could happen would be for those involved to accept the offer that is on the table, to call off the strike action and to get on with rebuilding the economy.

Paul Flynn: Witnesses before a Select Committee have said that the inquiry into the Werritty affair was rushed and inadequate, and possibly in breach of the ministerial code as it was not conducted by the only person who is the enforcer of the code: the independent adviser on ministerial affairs. As the inquiry was conducted for reasons of political expediency to avoid embarrassment for the Government, and as new evidence is available, should we not have a full legitimate inquiry conducted by the only person authorised to undertake it: Sir Philip Mawer?

George Young: No, and I am sure the hon. Gentleman did not intend to cast any aspersions on the person who carried out that inquiry, Sir Gus O’Donnell. It was a full inquiry; it was not rushed, as the hon. Gentleman implied, and I think it brought the matter to a satisfactory resolution.

Tony Baldry: May we have a debate on deportation? On occasions too numerous to mention, when I investigate through the UK Border Agency the immigration status of people who come to see me in my constituency surgeries, I discover that they had exhausted their possible remedies many years ago and had been told they had to leave the jurisdiction. They are exhorted to leave it voluntarily, but of course they have no desire to do so but want to stay in the UK indefinitely. Until we get to grips with the whole issue of people leaving the jurisdiction who have no right to be in the jurisdiction, we will never sort out the problem of immigration.

George Young: My hon. Friend is right, and he will know that in the last 15 months the Home Office has taken effective action and more people are now being deported than was the case in previous years. My hon. Friend the Minister for Immigration wants to make further progress, and I shall ask him to write to my hon. Friend setting out the further action we are taking to make sure that those who are not entitled to stay in the country leave it.

Valerie Vaz: On 3 November I raised an issue in respect of the public duty costs allowance. Uncharacteristically, I have not yet received a response from the Leader of the House as to why £1.7 million has been paid to former Prime Ministers. That money has obviously gone through the Government’s books in some way, so may we have a list of exactly what duties were performed, and whether invoices and receipts had to be provided?

George Young: I am sorry if the hon. Lady has not received any information that she is entitled to. I will chase this matter up the moment these business questions finish, and make sure that she gets an answer from the appropriate Minister.

Philip Davies: The TaxPayers Alliance has recently published a new and compelling report called “Industrial Masochism”, which demonstrates how the carbon floor price threatens the jobs of tens of thousands of British workers as energy-intensive businesses relocate overseas. Could we find time for an urgent debate on the impact of the Government’s climate change policies on British industry, so that workers in these vital manufacturing sectors can learn why their jobs have been sacrificed on the high altar of global warming?

George Young: I am grateful to my hon. Friend for his question. As he will know, following the statement by the Secretary of State for Energy and Climate Change a document was published setting out the impact of climate change policies on households and industry. I think my hon. Friend will find that that document comes to a slightly different conclusion from the TaxPayers Alliance. I would welcome a debate on this matter, as would my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) who spoke a few minutes ago, but I cannot promise that we can find time for that in the near future.

Ben Bradshaw: Will the Leader of the House invite the Prime Minister to come to the House to explain why he did not feel the need to declare his land deal with a major Conservative party donor and lobbyist? Following on from the question asked by my hon. Friend the Member for Newport West (Paul Flynn), what is the point of having an independent standards commissioner if his advice is never sought?

George Young: The right hon. Gentleman might have put that question to the previous Prime Minister. On the first issue, my right hon. Friend the Prime Minister took the necessary advice from those at No. 10, and that advice was that he did not have to register that particular piece of property. The information is in the public domain anyway because of the Land Registry.

Greg Mulholland: There is real concern in Otley among staff, students and the local community about the conversion of Prince Henry’s to an academy. May we have a debate on the rules surrounding conversion to academy status, because at present it can be done on a single, even a casting, vote on the governing body, and consultation can simply be whatever the school says it should be? That is clearly unsatisfactory, and it needs to be changed.

George Young: I say to my hon. Friend—[Interruption.] Those rules are—[Interruption.] Those rules—[Interruption.]

Mr Speaker: Order. It is very discourteous for all sorts of finger-pointing across the Chamber to take place. The hon. Member for Leeds North West (Greg Mulholland) has asked—[Interruption.] Order. [Interruption.] Order. I am not looking for, or expecting—[Interruption.] Order. I am not looking for, or expecting, any response from the hon. Gentleman, and it is not for the hon. Gentleman to sit in his place shaking his head. The hon. Gentleman asked—[Interruption.] Order. The hon. Gentleman had better watch himself very carefully. He has asked a question of the Leader of the House, and the Leader of the House is courteously responding. The hon. Gentleman will sit quietly and listen to that response. If he finds himself unable to do that, he knows what his alternative is.

George Young: The rules to which my hon. Friend refers are exactly the same as those that pertained under the previous regime, and which we inherited from the outgoing Government. I will draw his concern to the attention of the relevant Department and see whether there is any role for the responsible Minister to play, but I have to say that, by and large, conversion to academy status has been welcomed by local communities.

Kevin Brennan: May we have a debate on Lords reform? I do not know whether the Leader of the House is a fan of “I’m a Celebrity…Get Me Out of Here!”, but would not one interim solution to the overcrowding he is causing down the other end of this building be a new reality TV show, perhaps called “Peer Pressure”, as that would provide an efficient and entertaining way to cull the rapidly increasing population of the unelected?

George Young: The hon. Gentleman may find that when his parliamentary career here finishes he does not end up in the upper House. I say to him that one of the problems that we inherited from the outgoing Government was the total failure—[[Hon. Members: “Oh no.”] Oh yes. We inherited their total failure, after three elections where there had been overwhelming Labour majorities, to deliver on their election manifesto and reform the upper House. We have a draft Bill going through at the moment, which is being examined by a Joint Committee—I am sure that it will be interested in the hon. Gentleman’s views. The person who increased the size of the House of Lords more than anybody else was Tony Blair.

Charlie Elphicke: May I echo the call by the shadow Leader of the House for a debate on lobbying, particularly that by trade unions? Many of
	my constituents have expressed concern to me, as they feel that trade union cash should not buy a vote or an amendment in this House.

George Young: I would welcome such a debate. My view is that it would be in the interest of the Labour party to have a slightly weaker link with the trade unions. I think that many Labour Members, in their heart of hearts, believe that the pension deal on the table is a generous one which they would like to commend but cannot because of the links to which my hon. Friend has just referred.

John Spellar: Can the Leader of the House clear up his confusion over the Queen’s Speech? He had previously said that it would be in May. It was claimed that the Fixed-term Parliaments Bill would create a more predictable parliamentary timetable, and during its passage Lord Wallace, on behalf of the Government, committed them to May-to-May Sessions. Yet last week Lord Strathclyde referred only to “spring”, which we know means, in ministerial terms, from the first crocuses in February to sometime in the middle of June. The Leader of the House can clear this up now, so will the Queen’s Speech be in May—yes or no?

George Young: I refer to the answer that I gave to the hon. Member for Wallasey (Ms Eagle); we will announce the date of the Queen’s Speech in due course. If the right hon. Gentleman can be patient, he will find that the moment will come. The Fixed-term Parliaments Act fixes the date of the next general election in May 2015—that is a fixed event. The actual date of the Queen’s Speech between now and then depends on the progress of legislation. I hope that the right hon. Gentleman will use whatever influence he has in the other place to make sure that the Bills before it complete their passage in good time.

Robert Halfon: Has my right hon. Friend seen the e-petition from my constituent Mr Colin Riches entitled, “Support The Best Policy for Children; give Both Parents Equality in Law”? May we have an urgent debate on the Norgrove report and ensure that fathers have equal access to children?

George Young: I am grateful to my hon. Friend for drawing the House’s attention to the independent review panel, which has just reported. My right hon. and learned Friend the Lord Chancellor is considering all the recommendations in detail and will respond in due course. We want a family justice system that meets the needs of those at the heart of the system—the children.

Tom Blenkinsop: May we have a debate to discuss the challenging of racism in politics? If such a debate were secured, I would like to raise the issue of the St Andrews university Conservative association burning an effigy of US President Barack Obama last Friday. Almost one third of students at the university are American. Does the Leader of the House believe that such incidents are conducive to Britain’s relationship with its closest ally?

George Young: I would condemn what happened in that particular club, and I hope that there is no repetition of that incident in any organisation associated with my party.

Andrew Jones: Please may we have a debate about exports and, specifically, the success of British exporters? The latest data for the first three quarters of this year show a 13% increase in exports, with faster growth in exports to the BRIC countries—Brazil, Russia, India and China—especially China.

George Young: I am grateful to my hon. Friend for drawing attention to one of the ambitions of our economic policy, which is to switch the emphasis on growth from spending and borrowing to investment and exports. The fact that we are not in the eurozone enables us to have a competitive exchange rate, which in turn gives our exporters a head start over those in some other countries.

Julie Hilling: Are the Government delaying the Queen’s Speech because the economy is flatlining, because they have run out of ideas or because their legislation is so bad for Britain that they cannot get it through the other place? Are we ever going to have the Queen’s Speech?

George Young: The Government’s legislative programme has made good progress through this Chamber and is now in the upper House, where we are awaiting the Welfare Reform Bill, the Health and Social Care Bill and the Legal Aid, Sentencing and Punishment of Offenders Bill. I hope that those Bills will receive legitimate and proper consideration down there and then come back. When the Government have got their Bills through this House, it will then be time to give the date of the Queen’s Speech, but not until then.

Guto Bebb: May we have a debate on the maintenance of railway lines in Wales? The Conwy Valley railway line in my constituency should be maintained to route availability 7 standard. A commercial proposition to use the line to carry goods has been rejected because the line has not been maintained to that standard, thus costing jobs and investment which are much needed at this time.

George Young: I am grateful to my hon. Friend for his question because, as a former Secretary of State for Transport, I am interested in promoting use of the railway. The issue that he has raised is a technical one for Network Rail, but I will raise it with my right hon. Friend the Secretary of State for Transport to see whether we can make some progress and expand that route for the use to which my hon. Friend has just referred.

Denis MacShane: The Leader of the House must not keep hiding behind this wretched Wright Committee recommendation abolishing debates on Europe. I know that we have had specific debates on this and that, but the hon. Member for Harwich and North Essex (Mr Jenkin) is absolutely right to say that we need a broad debate on Europe, particularly at this stage of our historic relationship with the EU.
	The Backbench Business Committee carries out its
	Daily Mail 
	rent-a-petition, rent-a-debate duties, but it is for the Government to provide time to discuss this vital issue for our nation’s future.

George Young: I have to say to the right hon. Gentleman that if we had not implemented the Wright Committee’s recommendations, he might well have been one of the first to criticise us for going back on a clear election commitment. The fact of the matter is that the Government have given some of the power and patronage they used to have away. We have given it to the Backbench Business Committee, which gets roughly one day a week, and it is up to that Committee to decide what it does with that time. One set of debates that was handed over to that Committee, along with the defence debates, was the pre-European Council debates. The Committee has chosen not to have such a debate. That is a consequence of setting up the Backbench Business Committee and transferring the days to it.

Kris Hopkins: The Leader of the House may be aware that Welcome to Yorkshire, the official tourism agency for Yorkshire, is due to lose its public funding in April 2012. May we have an urgent statement from the Minister for Tourism and Heritage, my hon. Friend the Member for Weston-super-Mare (John Penrose), setting out what the Government might do to bridge this funding gap in the next financial year, in order to protect the Yorkshire tourism industry from potentially catastrophic circumstances?

George Young: As my hon. Friend will have discovered, other Members in the House think that their own county deserves generous support on funding tourism. Yorkshire was the county that received more cash than any other area of the country, and it is having to go through the same process as everyone else in adjusting to the new regime. It has an advantage, in that Yorkshire received £10 million of regional development agency funding for the financial year 2011-12, because of a three-year agreement between Welcome to Yorkshire and Yorkshire Forward, which other regions did not get. I can say to him only that there may be other sources of funding—the regional growth fund, the European regional development fund and the rural development programme for England—to which he may turn for assistance.

Heidi Alexander: I would like to return to the issue of the housing statement and the Homes and Communities Agency figures. They show that in London the number of social rented homes started between April and September this year was just 56, which is 7,469 down on the figure for the previous six months. If the Government knew that the figures were going to be released on Tuesday, why was the statement not made on the same day?

George Young: The statement was made in its own right, independent of the statistics to which the hon. Lady refers, and I do not think that she should link them in the way that she has. I hope that she will welcome what was said on Monday, which was aimed at kick-starting the housing market and doing better than the outgoing Labour Government on housing starts and housing completions.

Andrew Murrison: May we have a debate on the very long-standing regional disparity in rail ticket pricing, particularly given the welcome investment in rail infrastructure? Sadly, that will not directly benefit many of those living in the west country, who are at risk of becoming the poor country cousins on rail transport.

George Young: I have some sympathy with the point that my hon. Friend makes, because I sometimes see him on the same train as me when I go to my constituency. I will raise with my right hon. Friend the Secretary of State for Transport the issue as to whether there is a disparity between ticket prices and investment in infrastructure and see whether there is any role for her to play in getting a more level playing field.

Ian Murray: The Business Secretary gave a speech yesterday on the dilution of employee rights. It was accompanied by a written statement in this House and a fleeting mention in yesterday’s Opposition day debate. He now seems to be indicating, through the media, that he did not agree with a word that he said in either his speech or his written statement. May we have an urgent statement in this House on the role of employee rights and what the Government’s intentions are by making it easier to fire employees rather than hire them?

George Young: The Secretary of State for Business, Innovation and Skills was in the Chamber yesterday answering questions during his speech and he spoke in the House after he made his speech to the Engineering Employers Federation. We had an opportunity to cross-examine the Secretary of State only yesterday on precisely the issues that the hon. Gentleman has just raised.

Christopher Pincher: Earlier this month, despite the considered statement of the Chief Secretary to the Treasury on 2 November, West Midlands ambulance service workers voted to strike next week, threatening to bring chaos to a service that deals in matters of life and death. May we have a debate on the implications of that strike, because I fear it will be very deleterious to the health of many people in the west midlands?

George Young: I hope that people in the west midlands have listened to my hon. Friend and will reflect before they go on strike, if that is what they are planning to do next Wednesday, and on the consequences for schools and, in some cases, for health. I hope that if the Labour party has any influence it might bring that to bear on the trade unions, condemn the strikes and persuade them to abandon them and accept the generous offer that is on the table.

Alex Cunningham: The Leader of the House will be aware that a YouGov poll this week showed that 59% of people agreed with a total ban on smoking in cars with passengers, a view supported by the majority of all three major parties’ supporters. The British Lung Foundation, of which I know the Leader of the House is a supporter, says that 86% of parents support a ban when children are present. My ten-minute rule Bill on the subject is 10th on the list tomorrow and is likely to run out of parliamentary
	time. Will the Leader of the House please give some Government time so that we can debate that important issue and so that the House can make clear its view on a ban on smoking with passengers and children, and also on an outright ban?

George Young: I commend the hon. Gentleman’s work and that of the all-party group on smoking and health, which has played an active role in campaigning and was very influential in the last Parliament in making progress on the ban on smoking in public places. I cannot promise Government support for his ten-minute rule Bill—he will have to come along tomorrow and see what happens—and I see some difficulties in trying to enforce a ban on all smoking in cars. That might have to wait until public opinion has moved on.

Henry Smith: May we have a debate on the equity of child benefit payments, particularly when parents are separated but still have joint child care responsibilities?

George Young: My hon. Friend raises a serious issue. Sadly, more and more families are splitting up and there is an issue about whether the child benefit should go to one parent or another. I think I am right to say that at the moment it cannot be split. That is also the case with other child-related benefits. I will raise the question with my right hon. Friend the Chancellor of the Exchequer, who has responsibility for it, and see whether there is any way of coming to an arrangement whereby those benefits or tax credits are apportioned in a fair way to reflect the responsibilities that underpin them.

David Wright: The Leader of the House has debating time on his hands. May we have a specific debate about the provision of social rented housing in this country? There are 20,000 people in Telford looking for rented housing in the social sector and thousands of them are in urgent need. May we have a debate as soon as possible on rented housing provision? We have heard already from my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) about the collapse in the provision of new social rented homes and we need a debate urgently.

George Young: As the hon. Gentleman will know, I have announced that there will be an Opposition day. Perhaps his bid was heard by his friends on the Front Bench. He will also know that waiting lists doubled under the last Labour Government and that is the problem we are now trying to address.

Gavin Barwell: The sympathy that my constituents feel for public sector workers who face a freeze in their pay and changes to their pension contributions will be significantly eroded by the inconvenience and worse that will be caused by the proposed strikes. May we have a debate on the legitimacy of those strikes, so that we can see whether Labour Members will stand up for their constituents or their paymasters?

George Young: I am grateful to my hon. Friend. We are trying to get a fairer balance between the public sector employees and the taxpayer, who pays a very
	large percentage of the pension contributions. My hon. Friend raises a good point. I detect public sympathy ebbing away from those who are planning to strike and they would do well to reflect on that before they go ahead with their action on Wednesday.

David Winnick: Would it not be useful to have a debate in the very near future on the obsessive hatred—there is no other way to describe it—that the Tory party has and always has had for the trade union movement? Trade unionists need no lectures about public service and patriotism from the Conservative party.

George Young: That is a travesty of my party’s view about trade unions. I was a member of a trade union until I was expelled and described as a “pin-striped bovver boy” by ASTMS, the Association of Scientific, Technical and Managerial Staffs, back in the 1970s. The trade unions have a legitimate role to play in this country but we think that the very strong links between the trade unions and one political party are unhealthy for that party.

Andrew Selous: Our constituents in care homes are among the most vulnerable we represent and the Care Quality Commission is supposed to be one of their guardians, yet some of its recommendations are not always implemented. May we have a debate on the important subject of how we protect those very vulnerable constituents?

George Young: My hon. Friend is quite right that sometimes action is not taken. The answer is that the Care Quality Commission has a range of enforcement powers at its disposal and his message is that it should use those more often to address the problems he has described. The CQC has a range of enforcement powers that it can use to bring a provider back into compliance and in the case of the most serious failings it can cancel a provider’s registration, which would simply result in that provider’s closure. My right hon. Friend the Secretary of State for Health has emphasised to the CQC the importance of driving up standards and using all the powers at its disposal to do that.

Nick Smith: May I press the Leader of the House? Given the shockingly low number of affordable housing starts—just 454 in the six months from April, a figure that was revealed the day after the Government’s much-trumpeted housing strategy—may we have a debate in Government time on the crisis in our construction industry?

George Young: I hope that the hon. Gentleman will welcome the statement made by my right hon. Friend the Minister for Housing and Local Government on Monday, which addressed the parlous state of the housing and construction industry we inherited, the action we are taking to bring public land back into use, the incentives we are giving to local authorities to develop and the help we are getting through building societies and banks for first-time buyers. We are taking effective action to kick-start the sluggish housing economy that we inherited.

Glyn Davies: The economy of my constituency is almost entirely made up of small and medium-sized enterprises, public support for which
	comes from both sides of the England and Wales border. Will my right hon. Friend programme a debate to discuss the future of SMEs and support for them, with particular reference to cross-border issues?

George Young: There will be an opportunity to debate that issue in the debate on the economy that I announced at the beginning of this question session. We are determined to make more resources available to SMEs and, as part of Project Merlin, the Chancellor announced that the banks intend to lend £190 billion of new credit to businesses, which is a significant increase on the £179 billion in the previous year. We are taking other action, such as reducing the corporation tax rate for small businesses. I would welcome my hon. Friend’s contribution to that debate and the response from Ministers will set out all the action we are taking to help SMEs.

Kelvin Hopkins: Research reported last week has found that 10,000 babies are born each year damaged by smoking and the consumption of alcohol and drugs during pregnancy. Some 6,000 of those babies are affected by foetal alcohol spectrum disorders. Is it not time for the Government to make a statement on and bring forward proposals to deal with this tragic situation?

George Young: The Government are very anxious to drive down perinatal and antenatal mortality and we have taken a number of measures already to promote public health. The Health and Social Care Bill, which is now going through the House, will, I hope, make some progress in that direction. I will bring the hon. Gentleman’s suggestion to the attention of my right hon. Friend the Secretary of State for Health and ask whether there is more we can do to diminish the number of babies who are born damaged or, sadly, die because of excess alcohol consumption by their mother.

Brandon Lewis: Through the all-party parliamentary group for local growth, enterprise zones and local enterprise partnerships, it is clear that the organisations involved in enterprise zones understand the importance of opportunities for small and medium-sized enterprises in enterprise zones. Seajacks in Great Yarmouth is likely to be the first organisation to go into an enterprise zone, highlighting how important SMEs can be for growth and job creation. May we have a debate in the Chamber on the importance of SMEs, particularly with reference to opportunities in enterprise zones?

George Young: I believe that my hon. Friend is the chairman of the all-party group and I commend him for his activity in that regard. I hope there will be an opportunity when we debate the economy to say a little more about SMEs. We have extended the level of small business rate relief for two years. We have a new fund of enterprise capital funds, which I hope will help, and there is also entrepreneur’s relief and other initiatives such as the enterprise finance guarantee, all of which I hope will help SMEs to grow and employ more people.

Philip Hollobone: The National Audit Office has revealed the shocking statistic that £2 billion is owed to the Ministry of Justice by convicted criminals in outstanding confiscation orders and unpaid
	court fines. That figure is £400 million higher than in the previous year. Given that it is the policy of Her Majesty’s Government to reduce the number of people in prison and increase the number of criminals who are fined, may we have an oral statement from the Secretary of State for Justice, so that we can hold him to account for this shocking state of affairs?

George Young: My hon. Friend raises an important issue. That figure has gone up because the courts are using the relevant provision more often than previously. Also, some of the confiscations are for very large sums indeed—I think there is one of £189 million—which explains why there has been an increase. I can tell my hon. Friend that a blitz on this, using a range of powers such as attachment of earnings, seizure of assets and other measures, is planned to try to get that figure down.

Bob Blackman: Last Sunday in Hungary, legislation was passed that withdrew recognition of Hinduism as a recognised religion in the country. That threatens not only people’s right to celebrate and worship in accordance with the religion of their choice but the land-ownings of people who celebrate that religion. So far, the Hungarian ambassador refuses to take delegations representing those Hindus in this country and, equally, my right hon. Friend the Foreign Secretary has been unable to intervene in this process. May we have an urgent debate in the House on the protection of religious minorities in countries where they are threatened in this way?

George Young: I am grateful to my hon. Friend for raising the issue. I understand that our ambassador would be very happy to meet him and talk it through and that our ambassador has already raised the matter with the Hungarian authorities. As I understand it, the legislation is aimed not at discriminating against Hindus
	but at preventing quasi-religious organisations from benefiting from a tax break. It would be quite wrong if Hindus were penalised and I very much hope that the dialogue that my hon. Friend has with the ambassador will enable progress to be made and reassurances to be given to the Hindu community in Hungary.

Andrew Stephenson: The decision to extend small business rate relief until October 2012, which the Leader of the House has mentioned, has been hugely welcome in Pendle, where more than 1,000 small businesses fall into the relevant category and have benefited from paying either reduced business rates or none at all. May we have a debate on the success of that scheme and on what more the Government can do to support small businesses, which are the backbone of the British economy?

George Young: I very much hope that the Chancellor of the Exchequer tuned in and heard my hon. Friend make that bid, and that he is able to take it into account as he prepares his remarks for next Tuesday. As I have said, I hope there will be an opportunity to debate the extensive support that we are giving to SMEs when we have the debate on the general economy.

Therese Coffey: The Leader of the House will be aware that last year the House voted to raise the subsidy for post offices by up to £500 million, but there is no accountability to the House about how that money is spent, where it is spent and what criteria are used. May we have an urgent debate on that, because I believe that the Post Office is failing in its delivery of post offices, and we might be able to reopen the post offices in Wangford, Walberswick and Blythburgh?

George Young: I understand my hon. Friend’s concern. I wonder whether this is a subject that the Select Committee on Business, Innovation and Skills might look at and press with the Post Office. I will raise it with ministerial colleagues to see whether we can get some accountability for the large sum she has mentioned.

Points of Order

Mary Creagh: On a point of order, Mr Speaker. You will have heard in DEFRA questions a couple of hours ago the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), tell the hon. Member for North Wiltshire (Mr Gray) that he had protected the budget for the wildlife crime unit and for raising awareness about the need for people not to bring animal products back into this country when they go on holiday. That rang alarm bells for me because I asked the Under-Secretary how much he was contributing to the wildlife crime unit this year and he replied, in a parliamentary answer in March, that he had cut his contribution to that budget. Also, the budget for activity at airports and the “Don’t bring me back” campaign was about £45,000 under the Labour Government and has fallen to less than £25,000 per annum, so I wanted to set the House straight and to give the Minister the opportunity to correct the record as soon as possible.

Mr Speaker: I am very grateful to the hon. Lady for her point of order. My responsibilities do not extend to the financing of the fight against wildlife crime and I do not think there is a matter for the Chair here. One could be forgiven for thinking that the hon. Lady was seeking to continue the debate that took place at Question Time, but that would be an uncharitable view for me to take. Knowing her as I do, I know that she would not engage in that sort of unworthy endeavour. She has put her thoughts on the record and if the Minister were here he could respond, but he is not, so he cannot.

Thomas Docherty: On a point of order, Mr Speaker. You will be aware, further to the point that my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) made, of the disgraceful actions of Tory students at St Andrews university on Friday night when they burned an effigy of President Obama. The Courier newspaper has today reported that this action has failed to receive condemnation from the Tory leader and that it has received widespread coverage in the United States. On behalf of the people of Fife, may I make it clear that we absolutely condemn those actions? Has the Foreign Secretary indicated to you, Mr Speaker—

Mr Speaker: Order. I think we have heard enough. It was instructive for me to listen to what the hon. Gentleman had to say. Obviously, I have no responsibility for these matters, but the issue was aired a few moments ago and the Leader of the House’s response was absolutely explicit. As to what other members of the Government might or might not say or what statements on the subject could or could not be issued, that is not a matter for me. The hon. Gentleman is invariably like a dog with a bone and so I rather suspect he will pursue the matter if he feels so inclined, but I hope that he will not do so by trespassing on the time of the Backbench Business Committee.

Backbench Business
	 — 
	[Un-allotted Day]

BAE Systems

Mr Speaker: Just before I call the right hon. Member for Haltemprice and Howden (Mr Davis) to move the motion, I stress for the convenience of the House that the six-minute limit on Back-Bench contributions will take effect after the speech by the shadow Minister, which I think will be the fourth speech in the debate.

David Davis: I beg to move,
	That this House urges BAE Systems to act to preserve the UK’s defence production skills base and, as a recipient of enormous resources over many years from the UK taxpayer, to deploy those resources in such a way as to protect the nation’s manufacturing capability.
	On 27 September, BAE Systems, which is Britain’s biggest engineering employer, delivered an agonising shock to its work force. It announced that it intended to lay off 3,000 employees in its plants across the country. In this process it will be closing the production plant at Brough in my constituency, thereby terminating the jobs of almost 900 skilled workers and staff. That was a shock, but not a surprise because the previous weekend the newspapers had published a leak about those plans, which were in breach of all BAE’s codes of corporate responsibility. This cruel treatment of a loyal, decent and hard-working work force was, frankly, a disgrace. As I shall point out, that was not the only disgraceful aspect of this decision.
	The symbolism of this retrenchment could hardly be starker. Both aerospace and defence are massively important businesses for the United Kingdom. BAE is by far the biggest company in either industry in Britain. The size of the cutback is grievous and grimly symptomatic of the decline in manufacturing in this country—so far, so bad—but there is a risk in this storm of statistics and grand economic strategy that we lose sight of what really matters. What matters most is the misery that the decision visits on individuals, families and communities: the destruction of their hopes and the blighting of their lives.
	In Brough—a community that thinks of itself as the home of the Hawk, centred on a factory that has been building military aircraft since 1916—the shock was visible. It is one of those factories where grandfathers, fathers and sons all work, thus maintaining a proud tradition of skilled work through the generations. A number of married couples who work there met there. Therefore, after Christmas this year, whole families will be looking for work, and what a time and place to look for work. Many of them live in a part of Hull that has more unemployed people chasing every job than anywhere else in the country. In the past four years, the city and area have lost 7,500 manufacturing jobs—a quarter of all the manufacturing jobs now left there.
	Brough’s closure is not only an industrial tragedy, but a human tragedy—all so painful, and all so unnecessary. While Brough was announcing job losses across Yorkshire and Lancashire, Airbus was opening a £400 million
	factory, which increased jobs by 650 and underpinned 6,000 other jobs. That factory makes Airbus wings. In past years, Brough and other parts of the BAE empire have made the struts, spans and other parts of wings for Airbus.
	Until about five years ago, BAE maintained a stake in Airbus. The close relationship meant that Airbus components of all sorts were made by the BAE work force. That was a smart strategy. Although civil and military aviation operate on different business and economic cycles and different demands at any time, the manufacturing skills and requirements are interchangeable to a large extent. Until then, the company could switch resources backwards and forwards to whichever sector had the demand.
	Despite the counter-cyclical nature of those businesses, profits were stabilised—as, of course, was employment—but five years ago, before the banking crash and the sudden constraints on public spending, defence sales looked lucrative and profitable, and civil aviation looked just a bit too competitive. Now, all is reversed of course: defence sales are hard to come by anywhere in the world, and commercial aviation is booming.
	In 2006, in what must count as an astonishing piece of strategic myopia, the company made a hideously short-term decision and disposed of its stake in Airbus and withdrew from civil aviation. Britain is the country that created the first jet airliner. We now own no production capacity for civil airliners. That is not the only strategy error to hit the work force.
	Over the years, BAE and its predecessor companies have had a symbiotic relationship with the Government that is all too characteristic of defence industries. In the largely cost-plus environment of defence procurement, the British taxpayer funds the development and production of weapons and aircraft. British test pilots risk their lives testing, proving and improving those aircraft. In exchange, the nation receives the aircraft, equipment and weapons necessary to defend our shores and interests, but it also obtains a defence industrial capacity that supports us in time of war.
	In addition, the Government go in for defence sales support, specifically to maintain the viability of that domestic capacity. That is the theory. It seems to me that what has been happening is almost the opposite. Let us take, for example, the Harrier, perhaps the most iconic post-war British aircraft. Without it, we might have lost the Falklands war. It was developed with British taxpayers’ money and tested by British test pilots. Today, it is an American aircraft. As far as I can tell, the Americans paid little if anything for the transfer of intellectual property in the most innovative aircraft since the war, yet they now manufacture that aircraft: British money; British skill; American jobs and capability. Sadly, that appears to be happening again.
	If we win the potentially huge American order for the T-X aircraft, between 350 and 1,000 advanced Hawks will be manufactured not in Britain, but in Texas. What that means is demonstrated by what has been happening with the sales of the Hawk to India. In the past decade, about 150 Hawks have been sold to the Indian air force. The vast majority of them—all except the first 24, I think—have been built in Bangalore. BAE will tell anyone, as they told the right hon. Member for Kingston
	upon Hull West and Hessle (Alan Johnson) and me at the time, that it was a necessary offset and that it did not mean that it was moving Hawk production abroad.
	I looked in the Indian papers and the defence journals that cover both sides of the story to see what is happening on that project. Ashok Nayak, the chief executive of Hindustan Aviation, which builds the Hawk in India, said this year:
	“Last year, while negotiating the contract for 57 Hawks, BAE Systems wanted to give HAL”—
	Hindustan Aviation—
	“additional work in building Hawks in the future. HAL is looking for a large role in that build. What exactly, is still being discussed.”
	That was quoted in the Indian newspaper, Business Standard, but such things are said in not just one paper. The journal, Defence Now said much the same thing:
	“BAE was discussing moving more production to Hindustan Aviation”,
	effectively to create export sales out of India. Separately, reporting at the Paris air show earlier this year, the journalist David Donald said in another journal:
	“BAE Systems envisions no problems in maintaining the Hawk’s production status for many years, with the production line in India now driving and sustaining the all-important supply chain.”
	It is plain to see that, whether by accident or design, BAE is effectively moving to a position where the emblematic British aircraft, the Hawk—the Red Arrows aircraft—will be made abroad. That is where a serious part of our jobs are going now. What happened to the Harrier yesterday and what is happening to the Hawk today, if we are not careful, will happen to other aircraft in the future. In summary, successive British Governments have maintained a policy to keep a cost-effective British defence industry on British soil. BAE Systems has gained from that strategy, with the effect that we have exported those jobs and capability to foreign soil.
	It gets worse. Since the 1960s, to maintain a viable defence industry, successive British Governments of all parties have operated under a set of rules, known as the yellow book, that determine which costs the company meets and which costs the taxpayer meets. It transpires that when BAE lays off 3,000 workers, the BAE shareholder will not meet the cost, as is reported on the front page of the Hull Daily Mail today: “Taxpayers face £100m BAE bill”. Given how the system works, between £60 million and £110 million—we do not yet have the number—will be paid by the taxpayer, not by BAE, to lay off 3,000 people and destroy their jobs. That is outrageous.
	A policy designed to defend our defence capability is being used to make us subsidise the destruction of that capability. A policy designed to defend and protect British jobs is being used to destroy British jobs. If I were the Minister, I would not pay BAE a penny. I would tell BAE, “This is your decision. This is the outcome of your strategy. If you don’t like it, I’ll see you in court.”
	I should tell the Minister that I have spoken to the Chairman of the Public Accounts Committee about this matter, and she has agreed to have a National Audit Office investigation. I hope that that helps to stiffen the Ministry of Defence’s spine. I have also discovered that BAE has already benefitted to the tune of hundreds of millions of pounds from such yellow book subsidies for failure. I will ask the PAC to investigate that, too.

Ben Wallace: I have been following the thread of my right hon. Friend’s argument, but I point out that the issue is not entirely one-sided for BAE Systems. The previous Government signed a number of contracts based on the work throughput in a location. No matter what Her Majesty’s Government ordered, BAE Systems was guaranteed to deliver work, through the Clyde, Woodford and other sites around the United Kingdom. If the Government cancelled orders, BAE Systems had to pick up the bill, because it was a sort of Stalinist tractor factory contract that the previous Government put in place.

David Davis: Frankly, I will resist making this a Labour versus Tory argument, for a simple reason. For the past 10 years, when it comes to BAE Systems and employment in our constituencies, the right hon. Member for Kingston upon Hull West and Hessle and I have studiously aimed solely at protecting jobs, sometimes demurring from scoring political points. My hon. Friend the Member for Wyre and Preston North (Mr Wallace) makes a good general point: there is a central planning approach—a bad one—but the raw truth is that it was designed to ensure that our defence capability and defence employment were stable, and would be there in time of war. That has been turned, and it has effectively been used to destroy those jobs and that defence capability.

Jack Straw: Mr Deputy Speaker, who represents Ribble Valley, in which Samlesbury sits, together with many other colleagues, regardless of party, and I have sought to adopt the same bipartisan approach in our pursuit of BAE interests on our sides of the Pennines. We are in full support of what the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) are seeking to do. It would be terrible and hopeless if we turned this into a 2011 contest across the Pennines.

David Davis: The right hon. Gentleman is absolutely right on both counts. It would suit very well the people whose mind we are trying to change if we fought against ourselves on party political or geographical grounds. Much as I look back with amusement and fondness on past cricketing experiences in the wars of the roses, those wars need not be repeated here and now.

Tobias Ellwood: My right hon. Friend makes a powerful argument, much of which I agree with, but in the interests of balance, will he concede that there is another side to the coin? The Apache helicopter, which we purchased, made by Boeing, was built in the UK, not by the American work force. We also make kit that is exported: the empennage—the rear section—of the F-35, designed for an American market, is made here, and the M777 Howitzer is made in this country and exported. There is another side to the coin.

David Davis: There is another side to the coin, but since my hon. Friend draws me on that point, I am afraid that on one side there is a pound, and on the other there is a ha’penny. I was the Public Accounts Committee Chairman for five years, and I looked at the issue in close detail, and I have to tell him that the Americans are far more aggressive and effective than we are when it comes to protection of their intellectual property.
	The proposals have all sorts of strategic implications. One of the things that we looked at 10 years ago—I am probably not breaking too many secrets—was the advanced medium-range air-to-air missile. We were not even allowed technological knowledge of AMRAAM because of the Americans’ defences, and that made it less effective for us. This is quite an area of battle. Indeed, the previous Defence Secretary made quite an issue of this, as my hon. Friend the Member for Bournemouth East (Mr Ellwood) will know, and will understand only too well. We have not fought our corner very well, and I am afraid that BAE Systems is culpable, as part of that. It has been very poor in terms of its strategic decisions on civil and military aviation, and when it comes to protecting our intellectual property.

Greg Knight: rose —

David Davis: I shall give way for the last time, because many Members want to speak.

Greg Knight: I am most grateful to my right hon. Friend for giving way; he is being very generous. He posed the question of whether what was happening was the result of accident or design. Has he not now answered that question? The answer is design—it is the deliberate decision of the management.

David Davis: It is certainly the consequence of deliberate decisions. Whether the management intended this outcome at the beginning, or whether it is sheer crass misjudgment, I will leave the House to judge. What I am trying to do is lay out the facts as starkly as I can, because it was long ago time to open up the process to public scrutiny.
	That brings me to the decision today. The company is in the middle of a 90-day consultation period. From the start, the right hon. Member for Kingston upon Hull West and Hessle and I, and a number of colleagues—probably every Member of Parliament involved in the process—told the company that we would hold it to its legal responsibilities on a 90-day process. Those legal responsibilities involve being transparent and open, and looking in good faith at all proposals put to it. I repeat that: looking in good faith at all proposals put to it. Unfortunately I have to tell the House that, based on the company’s behaviour to date, it seems to me entirely possible that it has broken its legal responsibilities. It has not looked in good faith at all the options available to it, but I will leave it to my right hon. Friend—I beg his pardon, the right hon. Member for Kingston upon Hull West and Hessle; he is my friend—to say more on that later.
	I certainly expect the company to demonstrate why it turned down the options that it was looking at before it made the decision. As far as I can see, it has not even done that. Secondly, I expect it to give proper consideration to the plan drawn up by its management to preserve employment at Brough in my constituency, albeit at lower levels. Again, I think that the right hon. Gentleman will touch on that point.
	The work force at Hull are the best, in terms of attitude, productivity and skill, I saw in my 20 years in business before I came to the House, and BAE Systems senior management agree. The work force’s attitude is positive, their productivity is high, and the right
	hon. Gentleman and I have always been told that they are competitive on cost and quality. They deserve a proper chance.
	If the company does a proper, open-minded review, and the figures do not add up—I accept that is possible—its responsibilities do not end there. We have been fortunate: the Civitas think-tank has invested £50,000 in looking at the Brough site to see what it can be used for, how the skills can be deployed, and what we can do without destroying the skills base. For that, I thank it warmly. The chairman of the Government’s skill retention taskforce came to see us yesterday, and it is at work, looking for alternatives. The Government acted within two weeks and put in place two enterprise zones, one on each side of the Pennines, to help us in all this, but if we cannot come up with an alternative, we will again lose a critical mass of skilled workers that will not be replaced once it is dissipated. That is the nub of the matter.
	The job losses in Brough and on the other side of the Pennines are, to a large extent, a direct consequence of the company’s strategy over the years. The company’s profits come, to a very large extent, from taxpayer support.

Andrew Percy: My right hon. Friend makes a powerful point. On the legacy issue, does he agree that it is not good enough for BAE Systems to say, “We will do everything that we can to find people alternative work”? It has to make sure that that legacy remains in east Yorkshire, and that the site remains a site of employment in manufacturing for our constituents.

David Davis: My hon. Friend, who has been very active in this campaign, brings me to the nub of the issue. It is precisely because the company had, until five years ago, experience in civil aviation; precisely because it is the biggest employer of engineers in the country; and because of its knowledge, access, contacts and understanding of the markets, that it is best equipped to find an alternative use for Brough—full stop. That is what I—and others, I am sure—demand. It is not just Brough; I keep saying Brough because it is closest to my heart, but the company must find alternative employment and use for the assets and the work force across the country. That is what it is best equipped to do. Frankly, as far as I can see, so far it has not lifted a finger in that direction.
	There has been a lot of criticism in recent weeks of high levels of executive pay. Recently, the statistic came out that, over 30 years, senior executives have had a 4,000% increase in pay. Despite severe criticism of senior management by investors and others over the years, the pay of BAE’s chief executive grew by 8,000% over the same period, double the national average. I am not one of those who believe that people should not be paid large sums of money, but I expect them to earn it. They could perhaps justify their salaries—the chief executive’s is £2.4 million—by doing a better job not only for shareholders, but for employees and the country.

Several hon. Members: rose —

Nigel Evans: Order. I inform the House that the debate will conclude at 2.30 pm.

Alan Johnson: It is a pleasure to follow the right hon. Member for Haltemprice and Howden (Mr Davis). As he said, for the past 14 years we have worked together to try to protect the interests of BAE workers at Brough. We have been joined in that by other Members who represent constituencies in Hull and the east riding, many of whom are here today, but he and I have been working together on it the longest.
	Three consistent themes have run through all our discussions with BAE and its work force. First, there is a superb work force at Brough, as BAE has stated over and over again. Indeed, Allan Cook, who heads the Government’s talent retention unit and has a long history in the aerospace industry, having worked for Marconi, Cobham, BAE and Marshalls, told us a few days ago that he had never encountered such a talented group of workers in his entire engineering career. Secondly, there is the success of the Hawk. Since its first flight in 1976, 900 Hawk aircraft have been sold around the world. It is an iconic British product that is still in great demand, as I will show later. Thirdly, the work force have shown remarkable loyalty to, and respect for, the company. On the several occasions when the plant has been downsized, I have found the work force’s enormous respect for the company incredible.
	Since the announcement on 27 September, only one of those three consistent themes has changed; I am afraid that the company has lost the respect of its work force. One long-serving employee who wrote to me—I am sure that colleagues have received similar letters—said, “Until this week I was proud to wear BAE Systems’ name but now find myself appalled by the actions of the senior management.” That kind of sentiment has been repeated by people who feel utterly betrayed by the announcement and by the way it was made.
	BAE is seeking to end 100 years of aerospace manufacturing on the Humber not because of any problems with the staff or the product they produce, but because in difficult times it would rather impress shareholders with how tough it can be than impress the work force with how honourable it can be. The decision of the four Typhoon countries to slow deliveries of the aircraft was of course a blow, but the European Aeronautic Defence and Space Company and Finmeccanica are slowing production of the Typhoon in Germany, Spain and Italy without losing any highly skilled manufacturing jobs.

James Wharton: The right hon. Gentleman makes the important point that this might appear to be a short-term decision that benefits shareholders in the immediate future, but does he agree that in the long term shareholders would probably rather see the retention of an important skills base that will allow BAE to compete effectively in future and secure contracts?

Alan Johnson: That is absolutely right. That is why we wanted a debate in the House with a motion setting that out, because that is precisely the message we need to put out. As I will say later, that is precisely what other serious manufacturing companies are doing.
	Four countries are affected by the decision to slow delivery of the Typhoon, but only BAE in the UK has reacted by throwing highly skilled engineers out of work and abolishing a manufacturing plant. Although the company says that its announcement was forced by the slow-down in orders for the Typhoon, almost a third of the job losses are for the Hawk, an aircraft that remains popular around the world. Orders are imminent from Saudi Arabia, Oman, Iraq and the United States, and potential orders are imminent from Poland, Kuwait and the RAF in a few years’ time. When we and others, including the unions, have asked the company what will happen if they get an order for 10, 50,100 or 150 Hawks next week—this relates closely to the point that the right hon. Member for Haltemprice and Howden made about the 90-day process—its reaction has been that nothing would change. Our suspicion is that is because there is a view that it will not be the other side of the Pennines that benefits from extra Hawk orders, but Texas, India and manufacturing plants abroad.
	When the unions have berated BAE on the effects on British manufacturing and pointed out that it is an important British manufacturing company, it has replied that it is not a manufacturing company, but an engineering company that chooses to manufacture, the implication being that that is the choice it has made at the moment but might not make in future. In no other major industrialised country in Europe would a company that has spent much of the past decade moaning about skills shortages be getting rid of some of the most highly skilled people in the country. In no other major industrialised country would a company whose biggest customer is the Government and whose biggest investor historically has been the taxpayer be causing such damage to a precious sector of the economy.
	There is an alternative approach. Andrew Witty, the chief executive of GlaxoSmithKline, another British manufacturer that sells its products abroad, lambasts British businesses that turn themselves into “mid-Atlantic floating entities” with no connection to society. He says that his company has given a lot to Britain, but that Britain has given a lot to his company and that it would not exist without the work of British people and the support of the British Government. He is busy returning manufacturing jobs from abroad to this country. He says that his objective is to give more jobs, provide more skills and pay more taxes in Britain. It is a shame that other iconic international British companies do not follow the same philosophy.

Mark Hendrick: I am well acquainted with Andrew Witty, having met him at GlaxoSmithKline’s research and development centre in China. It is now a global business that employs thousands of Chinese people, and although the company returns a lot to the UK, it also has major investments abroad in the same way BAE Systems will have when it is employing people in India.

Alan Johnson: My hon. Friend is absolutely right. That is precisely the point. We can compare those two British companies. Around 96% of GlaxoSmithKline’s sales are abroad, but it is making a decision as a British company to invest in Britain and open manufacturing plants at a difficult time, and it is of course helped by the patent box that was agreed by the Labour and Conservative parties. It is an example that BAE should follow.
	As thousands of highly skilled BAE employees contemplate a miserable Christmas, it is time for the company to engage properly with its work force in order to ensure that their important skills are retained in aerospace manufacturing and that aerospace manufacturing is retained on the Humber. We are 58 days into the statutory 90-day process, but there is no sign whatsoever that BAE is doing anything other than going through the motions. Indeed, the site director at Brough told my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) only last week that nothing would change during this consultation process. He told her that they were going though the motions. When the 90 days end on Boxing day, it will still be 27 September as far as BAE’s plans are concerned.
	The unions are working hard to hold the company to its statutory obligations. The union representatives involved are very good and need no advice from me, but if I was a union rep involved in the case, I would seriously consider seeking a protective order against BAE for its lack of engagement.
	We believe that BAE’s three manufacturing sites should be retained. The company should stand by its loyal work force in difficult times, so that when the good times return it has sufficient manufacturing capacity in this country to deal with the extra work.
	All the signs are that military aerospace will expand dramatically from about 2016. At the very least, BAE should adopt the intelligent proposals put forward by its own executive group at Brough in order to mitigate the significant risk inherent in the company’s plans by retaining crucial assembly and sub-assembly at Brough for the duration of the next Hawk acquisition contract, thereby saving about one third of the jobs until 2016.

Tobias Ellwood: The right hon. Gentleman is making a powerful speech, but will he elaborate on his statement that the defence industry expects to expand with orders in 2016? From the angle that I see the issue, the United States, NATO countries and so forth are doing exactly the opposite: this is the area in which budgets are being cut; defence is being affected.

Alan Johnson: That is true, and I will turn to civil aerospace in a moment, but all the experts in the area, including the unions handling the situation, expect that from 2016 there will be an increase, particularly in Hawk orders. We are looking at the home of Hawk in Brough, and it is going through a difficult time, but most expect that, if we can get to 2016 and through the next difficult period in this country and throughout the world, there will be significant opportunities in military engineering.
	The executive group at Brough has put forward a proposal to safeguard what is probably the Saudi Arabia contract, to ensure that there are no dangers to it and, therefore, to save about one third of the work force until 2016. There is a desperate shortage of necessary skills to meet booming demand in the commercial aerospace sector by companies such as Rolls-Royce and EADS, so the retention of some Hawk work should be combined with facilitating and incentivising the transfer of packages of commercial aerospace work to Brough. It is an attractive site, with exceptional access by air, sea and land. It has the machinery, the layout and the work force that commercial aerospace companies need, and it can be utilised without causing job cuts elsewhere.
	It is time for fresh thinking. As the right hon. Member for Haltemprice and Howden has pointed out, we are in the crazy position of using taxpayers’ money to destroy skilled jobs in an economy that is desperate for high-value manufacturing to expand. It is time for an ethical and, even, patriotic approach by big profitable international companies, such as BAE, to the problems that this country faces. The Government have an important role to play in such a strategy, but the prime responsibility rests with the company.
	I have a final quotation from Andrew Witty. He says:
	“I…believe one of the reasons we have seen an erosion of trust…in big companies is they’ve allowed themselves to be seen as detached from society…They’ve allowed it to be perceived that it’s all about money.”
	BAE needs to avoid being a “mid-Atlantic floating entity” and to demonstrate that it is a British company that cares about British society and British jobs. The work force at Brough have been loyal to BAE in difficult times. BAE needs to reciprocate that loyalty now.

Several hon. Members: rose —

Nigel Evans: Order. I am going to call the Front Benchers next, but I ask them to be mindful that a number of MPs who wish to contribute to this debate have constituency interests in the matter.

Peter Luff: It is good to see a constituency Member in the Chair for this important debate, Mr Deputy Speaker, and I will do my best to be as brief as the complex issues raised allow.
	May I say how much I enjoyed both speeches that we have heard? My right hon. Friend the Member for Haltemprice and Howden (Mr Davis) seized the opportunity for this Back-Bench debate with his usual skill and aplomb, and he spoke with passion and conviction; and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) spoke movingly and thoughtfully. The company would do very well to listen to the concerns that they both expressed.
	I must emphasise, however, the deep regret that the Government and I, personally, feel at the job losses that BAE Systems announced on 27 September. Such decisions, I hope, are never taken lightly by companies, and we fully recognise the very real impact that they will have on local industry and individual livelihoods. I emphasise also—it is clear from the debate so far—that the decision was a commercial one, made by the company, which explained that it was necessary to maintain competitiveness both in the UK and internationally. This debate is testing that rationale.

Stephen Hepburn: I share the concerns about BAE that the mover and seconder of this excellent motion have expressed, because we are experiencing similar problems on the Tyne. The shock decision to switch work from A & P Tyne will have a disastrous effect not only on our region through the loss of hundreds of highly skilled jobs, but on the economy. Will the Minister urge BAE to rethink?

Peter Luff: I know the decision to which the hon. Gentleman refers, and it will of course please other parts of the country, because BAE Systems will do the work elsewhere in the UK, but I shall happily talk to him about it privately afterwards if he would find that helpful.
	I do not want to labour the point, but we all know how important defence is as an integral part of advanced manufacturing in this country. It sustains about 300,000 jobs, many of which are highly skilled, in thousands of companies of all sizes. Those employed are at the pinnacle of manufacturing and engineering ability, and they do a significant job in helping to keep our country secure. The industry is a key sponsor of manufacturing apprenticeships and training, the quality of which is acknowledged by employers across a range of industries, and intensive research and development programmes also mark out the defence sector as a source of innovation and intellectual property.
	The House will also be aware—this was at the heart of the two speeches that we have heard—that defence is a major contributor to export revenues. UK industry has an outstanding record of export success, second only to the US as an exporter of defence equipment and services. Despite the challenging market conditions experienced by many sectors of the wider manufacturing base, the UK has in the last year won almost £6 billion in new defence exports business. That represents an increase in our share of the global defence market from 18% to 22%, and we are committed to continuing that trend with strong support for future defence export campaigns, including the products mentioned by the Members who have spoken.
	Within that vital and dynamic sector of the UK economy, BAE Systems has a significant role. It has been the MOD’s largest defence supplier for some time; it is the fourth largest supplier to the US Department of Defence, which accounts for 50% of its revenue; and it is, indeed, the world’s second largest defence company. I should like to pay a tribute to BAE Systems: its speed and adaptability in updating software for the Typhoon aircraft’s radar and defensive aids systems was one of the keys to the success of the recent action in Libya, and we owe all its staff a great debt of gratitude for that.
	BAE Systems’ wider involvement, beyond Typhoon, extends to many of the MOD’s largest programmes, including the Astute submarine, the Type 45 destroyer, the Queen Elizabeth class aircraft carrier, the joint combat aircraft, general munitions and support for the armoured fighting vehicle fleet. Overall in 2010, BAE Systems’ revenue from the UK amounted to just over £4 billion, representing 20% of the company’s total revenue. So hon. Members should be in no doubt about the importance that the Government attach to the contribution of the UK defence industry in general and BAE Systems specifically to a re-balanced economy and export-led growth.
	Let me turn to the specific programmes that are relevant to today’s debate. In the air, Typhoon, a triumph of European engineering, has really come of age. It is a first-class aircraft and the envy of discerning nations throughout the world. Already in service with six air forces—in the UK, Germany, Italy, Spain, Austria and Saudi Arabia—and at the forefront of the world’s media coverage following its recent exemplary operational deployment in the skies above Libya, the prospects for
	expanding Typhoon’s user community have never been better, and Ministers are working hard to ensure that we crystallise those opportunities.
	Those export prospects meant that some changes were needed to the Typhoon programme. In May 2010, a request was made by the Eurofighter GmbH industrial consortium—I emphasise industry, not Government—to slow down the rate of Typhoon aircraft production in order to free up and sustain sufficient industrial capacity in the Eurofighter partner companies, comprising Alenia, BAE Systems and Cassidian, and to service export orders.
	The UK, along with the other partner nation Governments, agreed to the industry’s proposal in July 2011—on the basis that it would not adversely affect the build-up of our own Typhoon fleet. As a result, there is now the prospect of Typhoons being made over a longer time frame, with the production lines open to 2018 rather than closing in 2015 as previously planned.

David Davis: Will my hon. Friend give way?

Peter Luff: In just a second.
	The letter that BAE Systems sent to Members ahead of this debate does not accurately explain the reasons for the slow-down, which in turn is responsible for many of the redundancies in Warton and Samlesbury.

David Davis: The Minister has answered my question.

Peter Luff: I will return on several occasions to that letter, which was disingenuous in several respects, and am grateful to my right hon. Friend.
	The MOD has also invested £190 million in shaping a potential future unmanned combat air vehicle programme. BAE Systems has been our partner in that, and it led an industry team formed of Rolls-Royce, QinetiQ and GE Aviation. An unmanned combat air system programme could form part of a cost-effective solution in air-to-air and ground-to-air combat roles. That work includes the Taranis technology demonstrator, which is a world-class project and a testament to the UK’s advanced design, engineering and technology talents. It exhibits UK manufacturing capability at its very best.
	We recognise and welcome the investment that the industry is making in technologies for unmanned air systems and encourage it to continue, so that it will have products that meet our needs and those of export customers. I have to say once again that the letter sent by BAE Systems to hon. Members does not appear to do justice to the partnership nature of the programme, because BAE Systems seems to take all the credit for it. The letter refers to the significant funding BAE Systems put in, but it does not emphasise the Government’s funding or the other three partner companies involved in the project. BAE Systems should be a little more modest from time to time in the claims it makes on behalf of the company.

Graham Jones: Will the Minister explain the situation regarding UK air flights of Taranis and unmanned aerial vehicles, because there seems to be a problem with the Government not supporting test flights and not helping BAE Systems?

Peter Luff: The whole future of the unmanned combat sector is important for the Government and lies at the heart of the strategic future of aerospace and defence
	aerospace. We will be considering the matter extremely carefully later in close dialogue with the companies involved. The hon. Gentleman makes an important point. It is vital that the programme succeeds. The matter is complex as it plays into the UK-French bilateral relationship, but we are determined to take it forward in the best interests of UK industry and, crucially, the defence industry.

Diana Johnson: I listened with interest to that last point about how important the sector could be to the future of the defence industry. As an MP representing a constituency in Hull, may I ask the Minister whether he has had any direct conversations with BAE Systems about how that type of work could help to deal with the issues identified at Brough regarding future work?

Peter Luff: The short answer to that question is yes. I have obviously discussed the future of the sector with the company, but I have not done so in specific detail about Brough—in general terms, yes, but not specifically about Brough. If the hon. Lady wishes to make a suggestion to me, I will happily take it forward.
	The Government need an efficient defence industry, and I make no apology for saying that. Another line in the letter to hon. Members seems to suggest that we are in some sense to blame for wanting BAE Systems to be more efficient. We want it to be more efficient for the sake of taxpayers and also for the sake of export opportunities. I make no apology for demanding that efficiency of our suppliers.
	Although using open competition on the global market is the MOD’s preferred option and its default position for purchasing defence capabilities—I listened carefully to what my right hon. Friend the Member for Haltemprice and Howden said in that respect—in certain situations, the MOD has had to enter into single source procurement for some of the capabilities we must have in the UK. In these situations, we use the yellow book—it is called that because it is yellow—or “Government Profit Formula and Associated Arrangements” to give its full title. The yellow book covers the pricing arrangements to be used in single-source, non-competitive procurement. That can include reasonable rationalisation and redundancy costs, provided they are associated with a reduction in work related to single-source procurement.
	The yellow book arrangements have remained largely unchanged for more than 40 years, which is why in January this year I commissioned Lord Currie of Marylebone to undertake a root-and-branch independent review of it. The MOD is currently undertaking a consultation, which runs until the new year, on Lord Currie’s proposals. No decisions will be made on his proposals until the consultation has been completed.

David Davis: The Minister is making a very courteous and informative speech that is very helpful to us. Will he ensure that the response of the Public Accounts Committee and the National Audit Office to my request that they investigate some of the yellow book operations is taken on board in that consultation?

Peter Luff: Yes. In fact, there has already been discussion with the National Audit Office about aspects of the single-source regulations. My right hon. Friend makes a
	very important point and I welcome what he said about that in his speech. It is very helpful indeed to have those remarks on the record.
	The scope of Lord Currie’s review covers not just rationalisation and redundancy costs but a whole range of other issues associated with the process. He made his views clear on that in the document he produced, which states:
	“We do not recommend moving away from the requirement that the MOD should bear the redundancy and restructuring costs associated with programme curtailment or cancellation. The alternative, whereby the contract bears such costs, would be appreciably more expensive. Faced with the possibility of bearing such costs, the contractor would necessarily need to price in a significant, possibly prohibitive, risk premium into contracts against that eventuality, over which it has little or no influence.”
	Let us put those observations on liabilities in a BAE Systems context. The Brough site has historically been used for a variety of purposes, including the manufacture of the Hawk advanced jet trainers. It also has a structural testing facility used for a number of different airframes, and has been involved in the manufacture of some Nimrod MRA4 and Typhoon parts.
	Some of those projects were procured on a single source basis, but many of them were not. In the course of normal business, BAE Systems has approached us to begin discussions on payment for a share of its rationalisation and redundancy costs at Brough. We will ascertain what proportion, if any, of those costs we should be liable for under the yellow book framework. I can assure the right hon. Member for Kingston upon Hull West and Hessle and my right hon. Friend the Member for Haltemprice and Howden that our negotiations will be robust in defence of taxpayers’ interests. I am very grateful for their support in that process.
	We also recognise that the Government’s procurement decisions directly impact inward investment and exportability. Our involvement as the only level 1 partner in the joint strike fighter programme has brought significant high-end work into BAE System’s Samlesbury facility and, indeed, to UK industry more widely. That site manufactures the joint strike fighter rear fuselage for Lockheed Martin, in respect not only of the UK order but of orders from the US and other international clients. That production run should continue until at least 2035 and, on current plans, supply 3,000 aircraft. Following that, the UK should be very well placed to win additional competitively placed work within the JSF production support programme, potentially valued at £30 billion. Similarly, Government investment in the assessment phase of the electronically scanned radar for Typhoon will enable a capability leap for the Typhoon fleet. That not only benefits UK armed forces well into the 21st century, but improves Typhoon’s chances of success in the highly competitive, fast-jet market.
	One issue that has not been raised is the fact that the letter from BAE Systems to hon. Members alludes to the withdrawal of the Harrier aircraft, but it does not provide the context and detail for that decision. In the bipartisan spirit of today, I shall simply say that we had a very challenging financial situation at the MOD and leave it at that. It is also true that the previous Government took the decision to delete the Sea Harrier in 2006,
	which is the air defence aircraft. In 2009, they took a subsequent decision to reduce the size of the remaining Harrier fleet, which meant it was not large enough to achieve sustained operations in Afghanistan and maintain an adequate contingent capability for the unexpected on its own. A combined fleet of Tornado and Harrier would not be cost-effective, because retiring an aircraft type delivers significantly greater savings than running two smaller fleets.
	Although the withdrawal of the Harrier was a decision we took with regret, it was effectively forced upon us. Despite that sorry affair, we have worked hard to make the most of the situation. I can tell the House today that we have agreed the sale of the final 72 Harrier aircraft frames and associated parts, which will be used as a major source of spares to support the US Marine Corps Harrier AV-8B fleet of aircraft. The value of the sale is $180 million—some £110 million—and represents a good deal for UK taxpayers and the US Government. Added to the savings made from retiring the Harrier fleet from service, that sale takes the total estimated receipts and savings to the Ministry of Defence to around £1 billion. That will enable investment in a more modern and capable mixed fast-jet fleet, including the state-of-the-art joint strike fighter and therefore be good for British jobs.
	The Harrier was a marvellous piece of technology and demonstrates the UK’s significant contribution to the development of fixed-wing aviation. I pay tribute to all those who contributed to its design and manufacture, as well as to our service personnel who flew and supported them. Accordingly, I am pleased to announce that we plan to offer two Harrier aircraft to museums in order to preserve the UK’s aviation heritage.
	On the points made by my right hon. Friend the Member for Haltemprice and Howden about the overseas production of British aircraft, conditions in the international marketplace do influence commercial choices and outcomes —it is not just a matter of what the Government say. It is increasingly unavoidably the case that export customers are demanding that their orders be satisfied mostly or wholly by means of local production and technology transfer. There is often a need to satisfy that critical condition in order to secure an order. That is certainly a feature of many of the potential Typhoon and Hawk export orders. My right hon. Friend regrets it—I may regret it, too—but it is a fact of life. If we want to win business, this is the way we have to do business.
	The insistence on local involvement by the customer becomes even more likely and significant with larger export orders. The choice is to offer that condition or not to compete for the contract at all. That would reduce the viability of the businesses themselves and would be bad for UK employment. Last year’s deal to sell 57 Hawk to India was worth several hundred millions of pounds for UK companies, even though the final assembly was in India itself, so it is good for both sides of a vital strategic partnership for this country.
	However, we also fully recognise our responsibility to those whose livelihoods are threatened by changes in the market. Work will continue for some time at Brough and the Skills and Jobs Retention Group and the Jobcentre Plus rapid response service will assist skilled workers there and at the other sites in finding new roles.

David Davis: I think everybody takes the point that, in the modern defence market, there will be offset. Everybody has offset; we have offset. As has been made clear, offset arrangements do occur. It is problem when those offset arrangements become the permanent new manufacturing base for the aircraft, which is effectively what has happened with Harrier and seems at least to have been discussed with the head of Hindustan Aviation with BAE.

Peter Luff: I agree that when overseas production becomes a source of rival manufacture for export purposes, there is an issue for us. We have to accept, however, that the success of the Typhoon contract in India will depend on significant participation by Indian aerospace industries in the manufacture and upgrading of the aircraft. That is the price for winning the contract, and it is a price that we have to be prepared to pay.
	Additionally on the subject of support for those who are sadly affected by these decisions, last month the Chancellor invited strong and viable proposals for enterprise zones in the areas surrounding the sites, with a view to enabling those zones to be up and running by April next year. As the right hon. Member for Kingston upon Hull West and Hessle said, attracting new industry to these existing manufacturing hubs could soften the impact of BAE’s change in structure without undermining the lives of these highly skilled workers.

Alan Johnson: We are pleased to get an enterprise zone, but we need to look at other work that these skilled workers can do; many companies would be pleased to get them. Our point is that this requires a new way of thinking. There is no reason why we cannot bring packages of civil aviation work to Brough, where there is a fabulous site and a really good work force. The alternative is that these workers have to move, which is very difficult given the housing market and all the other problems that they face with schools, families and so on. We then find very highly skilled workers ending up as taxi drivers or dropping out because they have to stay in their local area. Will the Minister consider, with Allan Cook, attracting these packages, given that there is such a skills shortage in commercial aviation?

Peter Luff: I will do precisely that with the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey); it is very good to see him in his place today supporting this debate and showing the concern for the issues raised that is felt across Government more widely. Of course, I do not have responsibility for civil aerospace. Although I happen to agree with my right hon. Friend the Member for Haltemprice and Howden about the wisdom of selling the share in Airbus, that is a personal, not a ministerial, view. I believe that there are significant opportunities for the wider civil aerospace sector resulting particularly from what has happened at Brough, and I entirely agree that BAE Systems should be creative, thoughtful and active in making those opportunities come to fruition exactly as suggested by my right hon. Friend the Member for Haltemprice and Howden and the right hon. Member for Kingston upon Hull West and Hessle.

Kerry McCarthy: rose —

Peter Luff: I will give way for the last time, because I am anxious to conclude and let other Members speak.

Kerry McCarthy: Filton airfield is one of the enterprise areas linked to the local enterprise zone in Bristol. Is the Minister aware of concern about the closure of the airfield, which many people think will pose a real risk to aerospace jobs in the area? Does the Department have a view on that?

Peter Luff: I am aware of the issue, but the evidence suggests that that concern, although I understand it, is probably not well founded. I believe I am right in saying that today—

Jack Lopresti: rose —

Peter Luff: I give way to my hon. Friend, who might have more details than I do.

Jack Lopresti: I was concerned about the potential impact of the closure of Filton airfield on local jobs and industry, so the first thing I did was speak to local companies such as Airbus, Rolls-Royce and GKN, which all assured me that the existence of the airfield was not in any way consistent with their increased orders or viability in the long term—on the contrary.

Peter Luff: I am grateful to my hon. Friend. My understanding is that the Secretary of State for Business, Innovation and Skills is in the Bristol area today announcing additional jobs for Airbus. Although I genuinely respect the concern expressed by the hon. Member for Bristol East (Kerry McCarthy), I have heard other assurances similar to those of my hon. Friend. However, I promise that I will keep my eye on the situation as best I can, as a Defence Minister, and I am sure that the Department for Business, Innovation and Skills will do exactly the same thing.
	The defence sector and, in particular, BAE Systems have a significant role in rebalancing the economy by offering the taxpayer better value for money; and by offering the world the products, innovation and services required to compete on the global stage. However, BAE Systems must also be prepared to take responsibility for its decisions and to understand the debt that it owes to the country and the taxpayer.

Alison Seabeck: This is an important debate, not only for the workers affected in Brough, Warton and Samlesbury, and for their families and their wider community, but for the wider UK defence industry, UK manufacturing, and all the businesses and their employees in the supply chain.
	The case for this debate has been set out in stark terms by the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson). Their comments, though, have to be set against the bigger picture. We have an economy that is flatlining, with the lowest growth of any country in the G7 bar Japan—which, of course, suffered an earthquake and a nuclear disaster—and the lowest growth of any EU country bar Greece, Portugal and Cyprus, yet we have a Government Department that repeatedly states that the
	decisions on where redundancies fall are nothing to do with it. I have to ask the Minister whether that is also the view of his colleagues in the Department for Business, Innovation and Skills, the Department for Communities and Local Government, and the Department for Work and Pensions, who have to pick up the pieces and the costs of these significant job losses.
	We are talking about very skilled workers, whether in the north-west or Humberside, who have so much to offer to the company and to UK plc, and yet face a hugely uncertain future. It is far from clear whether the processes have been properly managed. It is also unclear whether the 90-day consultation process has been genuine or whether the company has been paying lip service to this requirement. I can well understand why right hon. and hon. Members and the trade unions that represent those affected speak inside and outside this place with such frustration and anger at how this is being handled by BAE as it downsizes and rationalises its footprint in the light of changing global demands. The leak in advance of its announcement is clearly unacceptable. We must understand just how much that affects the work force’s perception of the management and what had until now, as my right hon. Friend the Member for Kingston upon Hull West and Hessle said, been a very good working relationship. It is unclear what efforts have been made to relocate any of the work force and to consider alternative proposals from inside the company. My right hon. Friend, who has vast experience in these matters, posed a whole series of questions that the company needs to answer and in which the Government should take a close interest.
	I know that the Minister cannot answer questions today, but I hope he will none the less give serious thought to this. I was reassured to hear him say on several occasions that he would take away issues that were raised across the Chamber. That is not least because we saw in the 1980s the loss of large defence and industrial employers and the devastating effects that that had on communities. Those effects outlast generations, as we saw in my own constituency of Plymouth—and, indeed, in Barrow, in Woolwich, and in other places.
	This is a test of the Government’s willingness and ability to support British manufacturing, British defence industries and skilled British jobs, and not merely to talk of an export-led recovery. I do not mean to stray into territory that I am sure will be covered at length in the following debate, but the issues raised at Brough speak to the wider question of how the Government are failing to support British business and get the economy growing again.

Jack Lopresti: Will the hon. Lady give way?

Alison Seabeck: Forgive me, but I will not, because a lot of Back-Bench Members want to speak. The Minister gave way a lot, and we need to move on.
	A key part of the very significant contribution that the defence industries, and indeed BAE, make to our economy is the need for a strong defence industrial strategy —one that meets our overall defence needs and protects our sovereign capability. We need a coherent plan of investment—for example, in unmanned aerial vehicle technologies—that will help to sustain the whole-aircraft
	skills on which this industry has traditionally been based. Labour Members have already commissioned our own review of defence procurement, and it will be interesting to see whether, in the long promised White Paper, the Government pick up on any of the themes we have suggested, which deserve further consideration. Crucial too, and touched on in our document, is the economic case for a strong defence sector able to export goods and grow its markets rather than, as we are seeing now, having to scale back its work, shrink its work force and leave the taxpayer covering the cost of unemployment.
	The relationship that BAE Systems has with the UK Government, and therefore within the defence industrial base, is significant because of its substantial reach. It is a company of global significance with some 38,000 employees in the UK, one of the largest cohorts of apprentices, 10%-plus of all defence industrial jobs, and over a third of its sales market in this country. In fairness to the company, it does understand the need to protect the skills base. BAE also has some 9,000 UK suppliers, with tens of thousands, if not hundreds of thousands, of supply chain jobs therefore partly dependent on it.
	We are working in a market environment in difficult financial times, and it is therefore important to understand from the Government what discussions they had with BAE prior to this announcement. The Minister touched on that. Was the prospect of off-setting potential job losses from the slowing of programmes at BAE against the mooted development by Siemens in Hull ever discussed? Siemens, of course, was in line to pick up the work that Bombardier failed to get. There is some uncertainty all around this. We should be a little clearer about which branches of Government are looking to ensure that there is sustained, ongoing skilled employment in the Humber area.
	We have to have concerns when organisations such as ADS, the trade organisation advancing the UK aerospace, defence, security and space sectors, express the view that the current cuts to BAE are the tip of the iceberg. We need to be convinced that the Government are using all their tools—I realise that that is not solely the responsibility of the Minister who is present—to help those successful industries to be more productive. When the Government are the client, they must still ensure that the taxpayer gets value for money. The Government must decide whether they want to act to support sovereign capability with skilled jobs based in this country. If they do, they need to act now.
	We have to look at the potential problems facing the Typhoon programme. Italy and Spain are having difficulty paying their way. I heard the Minister’s positive comments about the Typhoon programme, but we need reassurance that the Government are doing everything they can to keep it on track. We need to be sure that, along with the Department for Business, Innovation and Skills, the Department is looking at the impact of the loss of intellectual property rights, such as those associated with the Harrier and the Hawk, which were mentioned by the right hon. Member for Haltemprice and Howden. Those are transferable, and in theory that allows build programmes to happen outside the UK. Will Hawk production be shifted entirely to India? Is that an entirely desirable endgame for the British Government? I suggest that it is not.
	I hope that the Minister will listen, as I shall, to right hon. and hon. Members in this important Back-Bench debate as they flag up what is wrong with the way BAE is responding to the current downturn, and highlight the ways in which the Government are not supporting British industry in this sector as Members feel they should. The Minister should not only take a direct interest in the current situation, as he has made clear that he does, but pay heed to the critical reports of the Public Accounts Committee and the National Audit Office, including any future investigations that they might undertake as a direct result of today’s debate, particularly into the yellow book. In the forthcoming White Paper, the Government should indicate clearly a positive way forward, because BAE, irrespective of the issues raised in the House today, is a significant player in the Government’s defence strategy and wider industrial strategy, particularly for fixed-wing aircraft and unmanned aerial vehicles, so it needs to be able to plan with some certainty within its own domestic market, as do all its competitors. In turn, it will be able to secure high-skilled jobs such as those at Brough into the future. We must avoid further job losses, any further loss of expertise and, of course, the poor use of taxpayers’ money.

Nigel Evans: The time limit has been reduced to five minutes in order to get everybody in.

Lorraine Fullbrook: I congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing this debate.
	In the South Ribble area, 15% of the residents who work in manufacturing work for BAE. BAE’s presence in Lancashire is vital to the local and regional economy. The motion is about preserving the UK’s production and skills base, and there is no larger manufacturing employer in the UK than BAE Systems. BAE is important to Lancashire not only because of its size as an employer, but because of the nature of the work force, who are predominantly highly skilled workers. Some 45% of BAE’s UK work force are based in the north-west, making it by far the most important region to the company. In turn, the company is the most important manufacturing base in the region. BAE provides one in eight of the knowledge-intensive jobs in the north-west. The Warton site alone added £300 million to the regional economy in 2009.
	Sadly, jobs are at risk as BAE Systems responds to changes in key programmes, most notably the slowdown of the production of the Typhoon and slower than anticipated rates of production of the F-35 joint strike fighter, and to pressures on defence budgets globally. It is essential that we all take every step necessary to support employees whose jobs are at risk, UK aero-defence manufacturing, and BAE in Lancashire.
	I want to reassure my constituents that I will back them, BAE, the supply chain and subcontractors to grow the manufacturing base in Lancashire. I am proud that my constituency and the north-west have some of the most highly skilled workers in the country. We must do everything that we can to ensure that, where possible, workers who do not retain their jobs at BAE as a result
	of this consultation remain employed in the defence manufacturing sector, for example at Rolls-Royce or Airbus.
	South Ribble needs BAE to remain competitive. I urge the Government to continue to do all that they can to support it and to ensure that it wins future business. I want to see that business carried out in Lancashire. Exports are essential. In 2009, the defence sector delivered more than £7 billion in UK exports, with £4.9 billion of that attributed to BAE alone. The Government are backing BAE and Lancashire in promoting the Warton-built Typhoon in foreign markets to help the region retain its defence industrial skills base.
	Typhoon has had the opportunity to increase its worldwide demand with its prominent role in Libya, when it was said that
	“Typhoon has truly come of age.”
	After its performance in conflicts in Libya, where it flew about 3,000 operational hours and reported a 99% success rate against fixed targets and a 98% success rate against mobile targets, the Typhoon is now the leading contender in the two-horse race to win a deal to supply the Indian air force—a deal worth $20 billion. Securing that deal and other export possibilities, such as to Japan, Malaysia and Qatar, would secure BAE’s position as the UK’s premier defence and security company and its largest manufacturing employer for many years to come. To ensure that the Typhoon continues to be competitive in the export market in the long term, I would like to see continued Typhoon development, including into e-scan radar capability.
	BAE has made a strategic decision to base its centre of excellence in Lancashire. Should BAE be successful in winning those contracts, the Typhoons will be built in Lancashire. On behalf of my constituents who work at BAE, I encourage the Minister to continue to rigorously promote the case for Typhoon overseas in any way possible.
	BAE Systems has invested considerable resources in an unmanned combat air system development programme. I was fortunate to be invited to the first viewing in July last year of the UCAS demonstrator, Taranis, which receives joint investment from the Ministry of Defence and the industry. Unmanned air systems are vital to maintaining a comprehensive military aerospace design and build capability in the UK. It is necessary to sustain these industrial skills in Lancashire for the continued safe operation of the Tornado and Typhoon fleets that are in service. I would like to see another UCAS demonstrator programme, following on from Taranis.
	I want to see the highly skilled pupils in Lancashire’s schools today become the highly skilled workers in Lancashire of tomorrow.

Mark Hendrick: BAE Systems is a world-leading manufacturer of defence and security products. It has bases scattered across the globe in places as distant as the United States, Australia and India. However, it is important that the UK remains at the core of its business and its base.
	Before the recent announcements, BAE Systems employed 40,000 people directly. When the indirect employment throughout the company’s supply chain is factored in, about 120,000 British jobs are dependent
	on BAE Systems. To further demonstrate the company’s standing, it generated £9.2 billion in revenues in 2009. It made a direct value-added contribution to UK GDP of £3.3 billion and contributed more than £650 million to the Treasury’s coffers. The Prime Minister has spoken at length about wanting to support British manufacturers. No company has done more than BAE Systems.
	BAE has a centre of excellence in the north-west. In 2009, a comprehensive report into the company by Oxford Economics stated:
	“The North West is by far the most important region within BAE Systems UK, accounting for about half of all its UK employment.”
	That is about 20,000 jobs. The report went on to make a point that has just been made by the hon. Member for South Ribble (Lorraine Fullbrook):
	“BAE Systems now accounts for exactly one in eight jobs in knowledge-intensive production within the North West.”
	BAE’s concentration in the north-west means that the recent announcement that the company will axe 3,000 highly skilled workers, half of them in Lancashire, is a body blow to the region, as I am sure it is in Yorkshire as well.
	The Warton site, which employs more than 8,000 people and contributes more than £300 million to the local economy, will see 822 redundancies. A further 565 jobs will go in Samlesbury, and more than 100 elsewhere in the region. Many of them are in my constituency and the surrounding constituencies in central Lancashire. That is a tragedy for those employees, their families and the region. We have heard a great deal about Brough today, but to put the matter in context, more jobs are being lost in Lancashire than exist at Brough as a whole.
	Contrary to some fairly derogatory remarks about the standard of the work force in Lancashire, Warton and Samlesbury are highly confident that they are capable of doing whatever work is required on any aircraft if the company asks them to undertake it. The north-west is where BAE Systems has placed the bulk of its operations, and it is where the company’s future lies. The north-west centre of excellence exists at Warton and Samlesbury, and it will be a major contributor to this country’s gross domestic product. Coming when they do, however, the changes are a particular problem for families on either side of the Pennines.
	The Typhoon jet is a huge success story, which we want to be continued. As the hon. Member for South Ribble mentioned, the jet undertook its first major combat missions earlier this year, providing an invaluable service in the skies of Libya. Production of the Typhoon has taken place in three tranches, and although the previous Government signed up to tranche 3A, it has sadly been subjected to the coalition’s ill thought-through and rushed strategic defence and security review. Rather than producing a carefully constructed industrial strategy, the Ministry of Defence is now planning to halve the UK’s tranche 3 order, and BAE will cut its annual production from 61 to 36 jets.
	Last week, the Minister made the point that much of what was happening was due to the slowness of ramping up work on the F-35. Nigel Whitehead, the group managing director, has made it plain in a letter to me and other hon. Members that the main reasons for the
	decision were the cut in the Typhoon, not the F-35, along with the withdrawal from service of the Harrier and the decision to scrap the Nimrod. That is what the company is saying about the facts.

Peter Luff: rose —

Mark Hendrick: I am happy to take the Minister’s intervention, because I have only 16 seconds left and I shall get some extra time.

Peter Luff: I am very grateful to the hon. Gentleman. Whatever the rights and wrongs of his argument, the letter makes it clear that that decision was taken in 2008.

Mark Hendrick: Which decision?

Peter Luff: The decision by the four core Typhoon nations not to acquire the full quantity of Typhoon tranche 3 aircraft was taken in 2008. I do not think I can take responsibility for the last Government’s decisions.

Mark Hendrick: I think the Minister is talking about tranche 3, not tranche 3A.
	It is important that people get the matter into perspective. For each of the 1,500 BAE Systems jobs lost in Lancashire, four other jobs will be lost in Lancashire as a result. It is a huge blow to the region, to Lancashire and to many hard-working families from Preston.

Mark Menzies: It is a great honour to follow the hon. Member for Preston (Mark Hendrick), who I know cares passionately about the jobs of the work force at Warton and Samlesbury, as I do. I thank the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) for securing this afternoon’s very important debate. None of us wishes we were having it, because we know only too well the impact that the job losses have had on our constituencies—not just the loss of skills, but the impact on communities and their economies.
	I am very proud to be the Member of Parliament for Fylde, and for the headquarters of BAE Systems manufacturing at Warton. Warton has a proud record not just of building the Typhoon but of developing the unmanned aerial combat vehicle programme and of building the Tornado, so I wish to focus many of my comments on it.
	Warton and Samlesbury truly have one of the most highly skilled work forces that I have ever had the privilege to meet. They are truly world-class, and for generations they have designed and built some of the world’s finest military aircraft. One needs look no further than Operation Ellamy in Libya to see their quality. It is no surprise that many of the world’s air forces are now looking to BAE’s aircraft to form the backbone of their capability.
	When I visited the Warton site last Wednesday, I was reminded that the people there are more than capable of taking on any challenge that is thrown at them. I take this opportunity to invite right hon. and hon. Members to come with me to the site to meet the unions, speak with the management and see the quality of what takes
	place there. I have the utmost confidence that whereas the reorganisation that is taking place at Brough means huge devastation and disruption to people there, the transfer of work from Brough to Warton and Samlesbury will be done with the utmost excellence. I know that the work force at Warton and Samlesbury would do no less.
	Warton and Samlesbury is the centre of excellence not for one area but for nine, which is reflected in the training and innovation that the work force there have built up there over the years. I take the opportunity to pay tribute to the unions for the constructive way in which they have engaged in a dialogue with me and other local Members over a long period. They are practical, pragmatic and an excellent example of a group of people who do everything with their members’ best interests truly at heart.
	It was my privilege to meet some BAE Systems apprentices two weeks ago at the Imperial War museum, and I am pleased that it is doing everything it can to support those young workers in their bright futures. On several occasions in the past year, I have also had the privilege to meet trade unions from Brough, and I know that the loss of the Hawk work will have come as a bitter blow to them. It is important that all Members do everything they can to ensure that the work force there are given every assistance to find alternative employment that reflects their skills. I take on board some of the comments that Opposition Members have made about how we can use those skills in the civil aviation industry, and no stone should be left unturned in that field.
	From a Government perspective, it is very important that we work tirelessly to ensure that we secure exports for the Typhoon and the Hawk. Nothing is won until it is won, and we should be careful about pouring cold water on some aspects of the work share agreement, because we have not won any of the contracts yet. I ask the Minister to consider options for bringing some of the deep maintenance work that is currently done on RAF bases to Warton, and whether that would provide potential stop-gap employment. I also ask him to get some of the multinational agreements on the unmanned aerial combat vehicle that are currently being discussed buttoned down, with finance arrangements in place. It is important that the work force and BAE systems can plan strategically for the future.
	Time is against me, but I wish to say that the right hon. Member for Kingston upon Hull West and Hessle is absolutely right in identifying the considerable support that successive UK Governments have provided to BAE Systems over the years. Now, BAE Systems has an opportunity to demonstrate its commitment to UK manufacturing by attracting some of the key component manufacturers to the new enterprise zones that have been set up on both sides of the Pennines. The work force at BAE Systems are truly the best of British, and it is important that both the company and the Government leave no stone unturned in putting their skills to future use.

Diana Johnson: I, too, pay tribute to the work of the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), who have championed the issue of BAE Systems for a very long time in the Humber
	area. I pay tribute also to all the Humber MPs who have been involved since the announcement in September about what will happen in Brough, and who have been fighting quite an effective campaign. I pay tribute to the trade unions at Brough, which provide an excellent example of a modern trade union movement that is fighting its corner very hard indeed.
	In an exchange that I had with the Minister on 14 November, I asked him what he was doing to support the people at Brough who had been told that their jobs were in jeopardy. Unfortunately, he gave me a response with which I was not very happy, basically saying that it was a matter for a private company, that it was up to the company to decide whether there would be redundancies and that it was not really anything to do with him. I noticed that today, he talked about his deep regret about BAE Systems’ announcement of the redundancies at Brough, but I say to him that it is not a factory making widgets. It is a defence manufacturer that is strategically important to this country, and in an area that is suffering disproportionately in the economic downturn.
	It is unusual to debate a specific company on the Floor of the House—debates are not normally about one company. There are three issues, the first of which is BAE Systems in the context of the Humber area. I am the MP of the constituency that has the dubious characteristic of having the most people on jobseeker’s allowance seeking a position—58.9 people are after every vacancy in my constituency. Any job lost in the area is a real problem for local people. The work force in Brough are highly skilled and motivated. If they lose their jobs, and if they can get other jobs locally, it is likely that they will be paid less and will not enjoy the conditions that they have enjoyed in previous years. Brough is an excellent example of manufacturing, and it would be a loss to the Humber region if it goes.
	I noted what the right hon. Member for Haltemprice and Howden said about the salary of Ian King, which is more than £2.5 million this year. We should compare that with the average salary in my constituency: 40% of people in my constituency are on less than £14,000, which puts into context the importance of those jobs to Hull and the Humber region.
	I hope that in the forthcoming White Paper, the Minister mentions not only the need to look at how we procure equipment, but the importance of maintaining manufacturing in the UK to its strategic capability.
	Will the Minister undertake to press BAE on the following matters? First, why will the company not consider taking up the interim proposal of the unions and the executives to phase the movement of Hawk production to Warton over the next four years? That would protect an additional 300 jobs at Brough and save the company £22 million in production costs on the current contract. Secondly, how will the company manage the significant risk involved in moving production to Warton? The risk should not be underestimated—the move seriously compromises BAE’s ability to tender for aircraft contracts in future. Thirdly, will the Minister press BAE on why it will not consider allocating some of its significant naval works to the Brough site?
	The Humber area is suffering with the economic downturn. My hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) mentioned the flatlining economy, but the economy is particularly bad in the
	Humber area—the region is suffering more than others in the country. The Minister and the Government need to consider very hard what else they can do through the Department for Business, Innovation and Skills to ensure that alternative work is brought to the Brough site.
	If BAE Systems goes ahead with its decision and makes people redundant, what legacy will it leave for the community, which has served it very well for many years? People have worked there for 20 or 30 years, and whole families work there. What will BAE Systems do? What will it leave behind for that community, which will suffer if the decision to make people redundant goes ahead?

Lorely Burt: I shall make a brief contribution on behalf of my Liberal Democrat Back-Bench colleagues. This has been an excellent debate. It is a bit disappointing that the Opposition Front Bencher soured it by making political comments, but there we are.
	The UK has the largest aerospace sector in Europe and is second only to the USA globally. Aerospace is very much the jewel in the crown. It enjoys 5% growth year on year and in 2011 turnover was £2 billion. The fact that the UK has its own defence company is very important strategically.
	The right hon. Member for Haltemprice and Howden (Mr Davis) said that manufacturing is declining, but it is not declining any more. In fact, it is up 2% as a percentage of gross domestic product, and by 10% in total.
	The closure of Brough and the other job losses that have been announced are a tragedy for every single family, but I understand that Brough has not had an order for the Hawk fighter for more than four years. That is a real challenge. I implore the Minister to do all he can to effect the smoothing of any job losses and to encourage the adoption of any additional services. In fact, if GKN, Airbus and Rolls-Royce can make money out of commercial aircraft, I do not understand why BAE Systems does not look at that. There is obviously money to be made.
	On job losses, the hon. Member for Preston (Mark Hendrick) made the point that for every job lost directly from BAE Systems, about four are lost from the supply chain. The Government have announced the two enterprise zones, and it is important that we do not lose those skills—not just the jobs at BAE Systems directly, but the jobs in the supply chain.
	I have not been intimately involved in the story of BAE Systems, unlike right hon. and hon. Members who have spoken, but there seems to be a case to answer, particularly, as the right hon. Member for Haltemprice and Howden said, for the potential misuse of the intentions of the yellow book. I welcome the Minister’s announcement that that will be reviewed, after a long period. The last thing we should be doing as a Government is allowing companies to make commercial benefit from the sad situation of job losses.
	I should like to compare what is happening at BAE Systems with what happened at a company that I know rather more about from my constituency: Jaguar Land
	Rover. Two years ago, we were not sure whether we would lose the site in Solihull, but the company, with its determined work force, worked out a strategy. It worked well with the unions, as we have heard, and JLR is now in the good times. The announcement of 800 jobs at i54 in Wolverhampton was made just a few weeks ago, and last week another 1,000 jobs in Solihull were announced. There are new markets, opportunities and new products. That is what brought that high-level manufacturing company back into good times.
	I appreciate that there are defence cuts and that BAE Systems must cut its cloth accordingly, but I hope our Minister can work with all the constituency MPs from both sides of the House to get a better outcome than the very sad one that we seem to be faced with at the moment.

Graham Jones: I thank the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) for securing this debate. The motion relates to the skills base of the UK's defence production, which many hon. Members have mentioned, and the workers who possess those skills are the most important aspect of the debate.
	I have huge concerns about BAE Systems’ decision to sack up to 3,000 members of staff and the necessity of taking such action. I do not think that the Government have been particularly helpful either. Like many hon. Members, I received a letter from BAE Systems, which said that on top of the Eurofighter slow-down, one of the principal reasons for the labour force reduction was a
	“slower than expected ramp up of the F35 Joint Strike Fighter Programme in the US”.
	However, when asked how that related to the 3,000 job losses, BAE told my office that it was “unable to quantify” the number of jobs that have been lost as a result of the
	“slower than expected ramp up”.
	It therefore seems odd to assert that as a reason for job losses. I am incredibly concerned by that remark, as it seems to mean that BAE Systems is planning to sack people that it has not yet hired, which is a strange human resources model for a company that prides itself on its employment record.
	Additionally, union officials representing BAE workers have told me that there are more people working on the F-35 than there were last year, and that there will be no decrease next year. In fact, BAE is still recruiting for the F-35. The Chancellor has said on more than one occasion that job losses at BAE are down to a reduced F-35 order from the US, which is not the same as a
	“slower than expected ramp up”.
	A reduction in projected future vacancies is not the same as losses resulting from reduced orders. I am worried that BAE is making ambiguous statements because the Government are making ambiguous statements. I pursued this in Defence questions on 14 November, but again was told that job losses were due to reduced F-35 orders. I hope that both BAE and the Government will shed some light on this point, as I am sure this House and those 3,000 people who may lose their jobs would like some clarity. I am told that there have been no reductions as yet in the F-35 orders.
	I support the motion, and I want the House to make BAE aware that the reason it has been brought before the House is because of its particular relationship with the UK and taxpayers. The UK, and Lancashire and Humberside in particular, have through the years provided BAE with a great many reasons to be satisfied, and the UK taxpayer has invested significant resources in supporting the company’s operations. I would hope that BAE would honour that by continuing to invest in the labour force and the UK’s manufacturing base. We do not just want letters from BAE telling us how committed it is to the labour force. I want BAE in the UK, doing what it does best: manufacturing, exporting and employing people. The company has a great track record on employment and on investment in its staff, and I know that to be true without being repeatedly told by BAE. One has only to look at its links with local colleges and generous apprenticeship schemes.
	I want BAE to recognise that it is deeply concerning to me and other hon. Members that the UK’s commitment to BAE is apparently not being reciprocated. Comments from a former Defence Minister about UK procurement moving towards “buying off the shelf”, and BAE’s huge expansion in Texas are worrying. The Government must be committed to a UK defence industry. The concerns of this House must be addressed: otherwise, BAE cannot justifiably continue to advertise itself on billboards and taxis as a company whose chief benefit to the UK is the number of people that it employs.
	I want to conclude by making some remarks about the relationship with the wider economy. There is an opportunity for the Government to act. It is obvious that the Government’s plans for the wider economy are not working, and it is becoming increasingly obvious that a change of direction is required. Upgrading the e-scan radar in the RAF’s Typhoon fleet, or investment in the unmanned aerial vehicles, which we saw successfully used in Libya, could secure and create new jobs in constituencies such as mine. Given the time limit, I shall conclude there.

Ben Wallace: May I congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing this debate? I put on record my sympathy for the members of the BAE work force who have lost their jobs or have had their jobs put under threat—by the recent announcement or, indeed, over the past few years as the aerospace industry has contracted. I also wish to place on the record my thanks to BAE as a business. Both its work force and its management invest in my constituency, not just in plant, but in the schools and the community. They do an excellent job, certainly in Lancashire, in ensuring that they support the community from which they draw their employees.
	In my constituency, I have nearly 3,000 BAE workers at both Samlesbury and Warton, as well as nearly 3,000 BAE pensioners. We should remember that when we bash the BAE brand as opposed to the work force, we may damage the share price, which is as important to the pensioners of BAE, many of whom live in the UK, as it is to job opportunities.
	Before coming into the House in 2005, I was the overseas director for QinetiQ, a large UK aerospace company employing 10,000 people. I worked in consortiums, because most modern aerospace is now done by consortiums and subcontractors. I have worked with BAE, Finmeccanica, EADS, General Dynamics, Lockheed Martin, and with many overseas customers, in selling Britain abroad and, supported by the last Government and this Government, in our embassies, through the Defence Export Services Organisation and Ministers, in trying to win contracts. So I come with an awareness of what the real world is like in manufacturing industries. Eurozone manufacturing, for example—not us, I emphasise —has shrunk faster in the last quarter than it ever has since the war. We have a £34 billion black hole in our MOD procurement budget, and defence spending cuts around the world are in progress; if the US Congress cannot reach resolution, they will certainly be made in the United States. These all have a large impact on us and we have to remain competitive, as well as deliver winning contracts, here and abroad.
	As for the background to the decision, we have heard before about the slow-down in Typhoon, and we do not have to repeat the economic problems of Spain and Italy, which are two of the partner nations in that project, which inevitably mean fewer shifts on fewer production lines. The joint strike fighter development delays involve both technical delays and Congress budget hold-ups. We are not in control of that process, but we are ready to do our best with the JSF. BAE and the Government have invested nearly £100 million in the Samlesbury site to manufacture parts for every single JSF—not just the British JSF, but the US JSF and everyone else’s. A joint strike fighter bought by anyone in the world will have part of its rear fuselage and some of its titanium manufacturing parts made in this country by my constituents and those of my colleagues in neighbouring constituencies.
	We should not forget that we need to ensure that we secure the JSF programme in the US. The US has a $600 billion defence budget, and we must not forget that not many countries spend that much. As part of that figure, the US buys many components, not just from BAE but from many British manufacturers. The C-130 Hercules has 29% of its components from British manufacturers. It is made in America, but subcontracted in the UK. It is as important to subcontract and make parts as it is to perform final assembly and check-out.
	I am afraid that I have to disagree with the analysis of my right hon. Friend the Member for Haltemprice and Howden about buying only what is made in Britain. The French have gone down that route, and their Rafale aircraft has sold precisely no planes abroad. Their aerospace industry is on its knees and they are desperate to try to privatise some of it or win orders abroad. We go head to head with them in India, and we can try to say to the Indians or the US, “No, you can’t have anything made there, you can’t final-assembly and check-out your aeroplanes there”, but we are not the only people in the ring. The French are desperate to save their aerospace industry, and there are two US contractors with dollar funds that make us look like midgets. We must do what we can, where we can: if it benefits the shareholder and the work force, that should be our priority.
	What can be done? The Government can be tougher in committing to our UAV programme and ensuring that it has a long-term future, and I ask BAE to be much more transparent about increases in orders.

Karl Turner: I start by congratulating the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing this important debate. I come to the debate late, not just because I have been called to speak late in the debate or because my alarm clock did not go off, but because my involvement with BAE goes back only to the last general election when I was elected to represent Kingston upon Hull East. I bow to the greater experience of right hon. and hon. Members across the House who have done huge amounts of work over the years in relation to the company.
	I want to say something about the trade unions at BAE Systems in Brough. I have met them on numerous occasions over the past 18 months and they have always been very committed to the company. They are pragmatic, and are not the type of trade union that hon. Members on the Government Benches would normally like to describe. They are very sensible in what they do and, in my experience, have always been very supportive of the management. But something changed. I met trade union representatives in July. Some redundancies had been announced at Brough, but they thought that everything was going well. As far as they were concerned, nothing was on the horizon. That was also the attitude of the management at the time, but on 27 September something went wrong and 899 redundancies were announced at Brough. The impact on the individuals concerned is clearly massive, and how they found out about the potential redundancies was disgraceful. They found out the same way I did—in the media.
	The work force are flexible and the trade unions are pragmatic, but from my meetings with the management I am convinced that they have already made up their minds. In my respectful submission, this so-called consultation period is a complete nonsense. They seem unlikely to change their view, and why would they given the yellow book situation that the right hon. Member for Haltemprice and Howden alluded to? I am told that up to 80% of the redundancy bill will be paid for by the taxpayer, so when a trade union official said to me yesterday, “That is me paying for my own redundancy”, he was absolutely right.
	The management have come out fighting. Chris Boardman claims that it is not entirely the company’s fault. He said that
	“we are in a really difficult period and the recession and the action the current Government has taken has just exacerbated that”.
	That might be right but the management have still acted particularly badly. The Government need to speak to them to see what we can do to save those jobs in my area.
	I want to talk about the campaign being run by hon. Members and others. A few Saturdays ago, my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) and I spent some time collecting signatures
	for a petition. Members across the House have worked hard on this together—it has been a case of non-partisan politics—which has been helpful. The
	Hull Daily Mail
	, too, has run a campaign to protect people at Brough, and should be commended on doing an extremely good job.

Andrew Percy: It is a pleasure to follow my near neighbour and fellow east Yorkshire MP, the hon. Member for Kingston upon Hull East (Karl Turner). I also pay tribute to my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) for securing this important debate.
	I cannot add much to the arguments about Brough so I shall talk about the impact on the local economy. First, though, I shall respond to one or two of the points made by other Members, starting with my hon. Friend the Member for Wyre and Preston North (Mr Wallace). It is a little unfair to suggest that we think that everything should be bought here in the United Kingdom or that there is some sort of magic bullet. We recognise the requirement for partnership, to which my right hon. Friend the Member for Haltemprice and Howden referred. We are asking, “Are we getting what we can out of these contracts, or is the country too subservient in this sector?”
	I am delighted that the debate has not turned party political or into a Lancashire versus Yorkshire argument, which is important to me as a Percy: the Percys fought on the Lancastrian side despite being a Yorkshire family. [Interruption.] Actually, we changed sides halfway through because we like to be on the winning side.

Nigel Evans: Order. May we return to BAE?

Andrew Percy: The point is that this has not been a political debate.
	I want to discuss the impact on east Yorkshire and my constituents in north Lincolnshire, a number of whom work at BAE Systems. It was brought home to me on the day of the announcement when my secretary, whose husband works at BAE, contacted me distraught about what was happening. Practically everyone who lives in east Yorkshire knows somebody who works at, or is connected to, the factory. As my colleague and near neighbour, the hon. Member for Kingston upon Hull East will attest—we were two boys at Hull comprehensives—when we went to school in the ’80s and ’90s if someone wanted an apprenticeship, they got one either at BAE Systems or at Saltend with BP. The vast majority of my compatriots and friends at school did not go to university but, like their parents, worked—and continue to work—at BAE Systems.
	As Members have said on both sides, the company is rooted in east Yorkshire, and the impact of its leaving will be indescribable not just on the work force but because of the work it does in local schools and through pairing with universities and colleges. As the hon. Member for Kingston upon Hull North (Diana Johnson) said, the Humber economy is in a pretty poor state, and has been for a long time. Over the past 10 years, we have lost
	private sector jobs along the Humber at a time when the rest of the country was growing private sector jobs. We are in a bad state, and the consequences of losing these 800 jobs will be indescribable.
	The Minister used the word “disingenuous”. That is what we all feel about BAE Systems’ actions. As the hon. Member for Kingston upon Hull East said, when we met BAE Systems in July—the unions and everyone who has spoken have attested to this—we were told that although things were tough, the company was expecting Hawk contracts and that the most recent round of redundancies had secured the site and the business for the future. We expected those contracts to be landed and those jobs to be secured.

Alan Johnson: Does the hon. Gentleman recall that the specific criterion on which BAE let staff go in the last round of redundancies to which we agreed was that it would retain those with the capability to build Hawk? That was as recently as this summer. Would it not be strange for BAE not to be aware at that time of the decision it announced in September?

Andrew Percy: Absolutely. None of us can explain how in just six weeks the whole world was turned on its head. We have sat through BAE presentations and been shown projections going years into the future—although oddly the line always ends about 2016 and we never get to see the line beyond. Despite these predictions, however, in six weeks the world was turned on its head. Members and people watching can read into that what they wish.
	We have talked about the legacy issues. It is unacceptable for BAE to think that its role is simply to secure work for the Brough workers elsewhere in the country. Constituents of mine who work at BAE Systems, including the former mayor of Goole, do not want to leave the local area or uproot themselves from their families; they want to stay working in east Yorkshire. After all, along with north Lincolnshire, it is the best part of the country to live in—so why would they wish to leave? They want to remain on that site.
	I say to BAE—I hope that the Minister will listen to this message and take it forward—that it has a duty to do everything in its power, even if it hits it in the pocket, to ensure that manufacturing remains on that site, if not through the production of Hawk and other aircraft, through securing other companies and third parties on the site. It cannot walk away from Brough. It cannot say, “Well, we’ve done everything we want to do. We’ll help to find them jobs.” It has a duty to secure that site, and we, as local Members of Parliament—and, I hope, with the support of the Government—will do everything that we can to ensure just that.

John Woodcock: It is good to follow the hon. Member for Brigg and Goole (Andrew Percy). I shall take up some of the points about which he spoke so well. We have also listened to powerful speeches from the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson). I hope that the company will listen to them, make this consultation genuine and rethink its approach to the jobs currently set to go.
	It is hard to underestimate the appalling hardship that looms for these communities. While the Astute programme in Barrow shipyard is maintaining the order book there, we remember and still feel the scar of the 10,000 jobs lost there in the early ’90s and the tale of long-term benefit dependency, which still remains with us to an extent to this day. It is not only those communities that feel the blow, as this is a hit on the defence industry across the north where synergies between the aerospace and shipbuilding industry jointly support supply chain jobs, which many people will be worried about if these job cuts go ahead.
	Most of all, of course, this affects individuals. When I attended BAE’s apprenticeships awards earlier this month, I saw brilliant talent there—people who had been employed in engineering manufacturing kit to help injured troops returning from the front line who were based at the Queen Elizabeth military hospital in Birmingham. The teams from the affected sites were not clear about what their future would be or whether they would be able to remain.
	Previous speakers have highlighted the company’s responsibility to rethink. I want to stress the importance of the questions facing this and future Governments about their approach to the defence industry and to maintaining our defence industrial base. In an earlier intervention, the hon. Member for Wyre and Preston North (Mr Wallace) criticised aspects of the previous Government’s defence industrial strategy as Stalinist. The right hon. Member for Haltemprice and Howden pointed to ways in which companies are still able to offshore, despite agreements put in place in certain areas. It is a great worry that current Ministers seem reluctant to take responsibility for helping to shape an overall strategy for industrial capacity.

Ben Wallace: If my memory serves me correctly, the hon. Gentleman was a special adviser in the Ministry of Defence—if not, I apologise, as I would not want to tarnish him with that accusation. Does he not think it wrong that under the last Government—it is not about party—the decision was made to underpin industrial strategy by guaranteeing work for a period, such as for 15 years on the Clyde, even if contracts were not going to be placed. That would restrict future Governments in deciding the shape of the armed forces and taxpayers’ money would be used to compensate for work that did not actually exist. The Government were the contractor.

John Woodcock: Agreements that secured work in the UK were really important. Where there are lessons to be learned from how those agreements were put in place, we should learn them, but the current Government have turned their backs on this whole approach and that is a cause for considerable alarm. At a time when the Prime Minister and the Business Secretary are talking about reforming the Government’s overall procurement process to try to encourage more jobs here in the UK and to protect supply chains, I hope that such an approach will be meaningfully reflected in a rethink by the Ministry of Defence and in its forthcoming White Paper.
	Whatever the balance of responsibility between Government and suppliers for ensuring that the current crisis is addressed and the future set more securely, we need to remember that it is not just the economic
	implications for areas that are important—as, indeed, they are—because what happens affects our ability to protect our country and support the front line. I have gone around and talked to companies and small businesses that are part of the supply chain about how they have been able to speed up getting vital equipment to troops on the front line for urgent operational requirements in Afghanistan. If our industrial base shrinks and we end up knocking on the door of foreign companies when we know we need new kit to ensure that we can have an edge on the battlefield, we will not have anything like the same level of guarantee that we will be able to accomplish that.
	Finally, in an uncertain world, we simply cannot know what our defence requirements are going to be in decades ahead. It could significantly increase the nation’s vulnerability if we allow our prized industrial base to shrink from here.

Several hon. Members: rose —

Nigel Evans: Order. We have three more speakers. I shall allow them their five minutes each, but I strongly discourage any interventions during their speeches.

James Wharton: I congratulate hon. Members of all parties on what has been a passionate and heartfelt debate on behalf of constituents right across the country. It is always reassuring when there is a consensus across the political divide on an issue of such importance.
	I shall speak primarily about one facet of this decision—the policy that successive Governments of whatever colour have taken towards defence procurement and how it should be considered by BAE as it moves forward. In broad terms, there are two camps on defence procurement. There are those who believe—we have heard some of their arguments put forward eloquently today—in the strategic imperative of retaining our defence industrial production base: our capability as a nation of building our own defence and aerospace systems. At one extreme, that could mean everything from building the wings and canopy on a fighter jet to supplying the bullets that go in SA80 A2. That is a valid argument that retains an integrity and strategic independence for the UK, which has been valued highly by Governments for many years.
	At the other end of the spectrum—the other argument put forward by the likes of Lewis Page in his book, “Lions, Donkeys and Dinosaurs”—is the suggestion and proposal that we should buy “off the shelf” and look to find the most effective but also cheapest option that meets our defence requirements and needs. We should not falsely subsidise an industry, as some argue, for strategic reasons when so many other countries across the world supply their defence needs by “off the shelf” methods because they do not have that home-grown capability.
	The reality for BAE is that it is a company that is a product of political decisions taken over many years. It is a product of decisions taken by the British Government
	to retain the defence infrastructure and capability for a variety of strategic and economic reasons, including the benefits that flow from that in jobs, development, R and D, new technologies and exports. In 2009, BAE exported about £4.9 billion-worth of equipment, expertise and knowledge from the UK. That is very valuable for our economy and helpful to the Exchequer.
	BAE is a product of a series of policies. This debate sends an important message to the company. If by the decisions it takes it loses the skills base that allows it to be competitive, and if it stops delivering, or reduces, the jobs benefits and economic advantages to this country, there is a danger that those who propose a more purist free-market approach to defence procurement will feel that their argument is strengthened. BAE’s great strength is that it has provided British jobs, growth, investment, technology and research. If it loses skilled workers and finds itself having to re-recruit when future contracts are secured, thereby driving up its costs and driving down its competitiveness as well as damaging our skills base nationally, it will weaken its future prospects and strengthen the argument of those who believe that we should be looking to buy more off the shelf and to rely on others to do the heavy lifting of developing defence technologies, all of which are expensive. Although at heart I am a free marketeer, I am extremely concerned that BAE might take a decision that benefits its short-term profit margin but in the long term could damage its capabilities, strategic position and ability to compete successfully for British contracts.
	I am concerned that the arguments of those who do not believe in, or support, our home-grown defence production infrastructure will be made stronger by what appears to be a short-term decision that will benefit neither the company nor this country. I therefore urge BAE to listen to what Members have said today, and to look at the options available to it. I ask it to reconsider its decision at this time of great economic need for the United Kingdom, and to come to a different decision that would be better for its long-term future and that of its work force.

Thomas Docherty: I speak in this debate both as a member of the Defence Committee and a constituency Member who has an interest in the future of BAE Systems. There is a plant in Hillend in south Fife that employs more than 200 BAE workers and makes radar components for the Typhoon aircraft.
	This has been a remarkably consensual debate. I have a positive view of BAE Systems; it does a tremendous amount of good work in my constituency. Last week I visited the Abbeyview day centre; for its 25th anniversary, BAE gave it a grant of about £1,800 to allow it to continue to provide support to our older citizens, many of whom are pensioners who previously worked at BAE.
	The hon. Member for Stockton South (James Wharton) talked about buying off the shelf. I believe BAE, along with many other defence industry companies, produces some first-rate exports. The Typhoon aircraft proved itself superbly during Operation Ellamy in the skies above Libya, and we look forward to the arrival of the F-35 Lightning II. It is worth noting that the Lightning I, which was made by one of the predecessors of BAE
	Systems, BAC, was the finest jet aircraft of its generation and a testament to what British aeronautical engineering can achieve.
	The Defence Committee did, however, have some concerns about the ongoing cost issues in respect of the F35. Those concerns are shared by our colleagues in the Senate Armed Services Committee. We have communicated those concerns to the Minister, and I have discussed them with him on several occasions. I know that he is committed to ensuring that BAE Systems and other companies do not allow costs to ramp up beyond control. The Defence Committee welcomes the Minister’s response to our last report. He announced that some of the Ministry of Defence’s best minds are currently working on the F-35 procurement programme.
	It is disappointing that not a single Scottish National party Member has taken part in this debate. One might speculate that that is because they are part-timers, or because the SNP would, in its separate Scotland, destroy the defence industry in Scotland. Members on both sides of the House have talked about the value of jobs, and it is worth remembering that there are more than 4,000 BAE Systems employees on the Clyde working on shipbuilding. I have a number of BAE Systems staff working at Rosyth on the aircraft carrier Alliance, alongside their Babcock colleagues. They are engaged in ship assembly and refitting work. Those jobs would be lost in a separate Scotland. The SNP has offered no alternative to that.
	Nor has the SNP explained what the future of the RAF or a Scottish air force would be. It has given no idea of the type or size of the Scottish air force. One can only assume it will not be buying any F-35s. It has said nothing about how many Typhoon aircraft it would purchase. We can only assume from that lack of information that it does not see a future for BAE Systems in Scotland, and that it would not offer any defence work to companies such as Babcock and BAE.
	The fact that this has been a consensual debate is to be welcomed. In that spirit, I hope the Minister will promise to work with the trade unions in making the case for the defence industry in the UK. It is important that we continue to have exports around the world and that the Ministry of Defence sees part of its role as maintaining the business model for companies such as BAE Systems and Babcock. The MOD should be proactively going out and selling the virtues of the Typhoon and the F-35 Lightning II. I hope that the Minister will undertake to do that in the months ahead.

Tobias Ellwood: It is pleasure to be the final contributor to this important debate, and I begin, as others have done, by congratulating the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) on securing it. Some interesting messages have emerged from it, both for the Government and for BAE Systems.
	My right hon. Friend began by highlighting the importance of these decisions and the impact they will have on families where redundancies are involved, not only in his constituency—in Brough, which I know well, as I was married just up the road in Kilnwick—but across the country, as 3,000 jobs are going. The defence
	manufacturing industry can be a ruthless and competitive business, and we must bear in mind the impact on individuals, families and communities. He also mentioned that Britain no longer makes jets. That is true, but we do make an awful lot of parts. We are part of various consortiums, and that is the way forward, as it is in the car manufacturing industry. It is difficult to think of aircraft that do not utilise engines from Rolls-Royce, wings from Airbus and so on. That is the way of the world and we can at least be proud of the extent to which we are part of the great defence consortiums.
	The Minister was right to remind the House that this country still has the second largest defence industry in the world, and our share of exports has indeed increased in the past year. My right hon. Friend the Member for Haltemprice and Howden also mentioned the concern that jobs involved in putting together these products, particularly the Hawk, are going to India. He countered my intervention by saying that I was absolutely right and that although we do export the M-777 and the empennage—the rear end—of the F-35, perhaps BAE Systems could look more wisely at things, particularly future upstream developments such as the Mantis, the Taranis, the Type 26 and other intelligence, surveillance, target acquisition and reconnaissance—ISTAR—assets which could be built in the UK rather than elsewhere. He also made an important point about executive pay, and restraint could be shown there.
	We are being affected by an economic slowdown and that does cause a review of budgets, not least in the United States. That is why we are affected by what is happening with the F-35B, because it is American orders that are having an impact on us. That is not a decision made by our Government. However, this Government have had to make some very difficult decisions. Along with other Departments, the MOD received a cut of 7.5%. In addition, as confirmed by the Audit Commission’s report in 2009, there was a £38 billion overspend on procurement projects that had to be contained.
	That raises the question about the involvement of the Government: how far do any Government get involved in the decision-making process of the defence industry, particularly in securing orders? As has been mentioned, there is a decision to be made about whether to buy off-the-shelf or have procurement processes. The first step is to have a strategic defence policy and a review to make sure that there is clarity about where we want to go. Let us consider what happened in Afghanistan. The replacement of the Snatch Land Rover took some time, and the Cougar, Vector, Jackal, Mastiff and Ridgback were procured off the shelf and then, in one way or another, got rid of. At the same time, BAE Systems made the RG31, a mine protected vehicle used in South Africa, and the MRAP—mine resistant ambush protected—vehicles, which were used by the Americans, but both those were ignored.
	Mention has been made of the Nimrod, but that is a very sad tale indeed. The first contract was signed in 1996 for delivery in 2003, but by 2010, when the coalition Government were formed, not a single aircraft had been delivered. The cost of each aircraft had also jumped from £133 million to £455 million, which is a huge increase. This aircraft was of course based on the Comet design—it was a 1960s design. That was an appalling procurement project and eventually it had to come to an end.
	I shall end my contribution by saying that I am very pleased that we are having this debate, as there are huge lessons to be learned in the procurement process. I am pleased that we have come forward with a defence industrial strategy. Redundancies are always regrettable and I hope that BAE Systems and the Government will take heed of the various messages that have come from hon. Members on both sides of the House in this debate.
	Question put and agreed to.
	Resolved,
	That this House urges BAE Systems to act to preserve the UK’s defence production skills base and, as a recipient of enormous resources over many years from the UK taxpayer, to deploy those resources in such a way as to protect the nation’s manufacturing capability.

Manufacturing

Nigel Evans: I remind the House that there is a five-minute limit on Back-Bench contributions, but not for the first two speakers, the Minister and the shadow Minister.

Guy Opperman: I beg to move,
	That this House has considered the matter of the future of manufacturing.
	Manufacturing should be at the heart of any long-term plan for economic growth. It is a sleeping giant that, if revived, would become the backbone of a strong UK economy. It is entirely right that, five days before the autumn statement, we should have the opportunity to debate the subject in broad terms in the House. I thank the Backbench Business Committee and the House of Commons staff for their assistance in bringing this matter before the House and, in particular, I pay tribute to my co-sponsors, the hon. Member for Huddersfield (Mr Sheerman), my hon. Friend the Member for Warwick and Leamington (Chris White) and the hon. Member for Burnley (Gordon Birtwistle), who have adopted an all-party approach to this problem which affects us all.
	It is well known that I used to be a jockey and a lawyer, so it is legitimate to ask how on earth I can have any credibility in speaking about manufacturing. All MPs do, because we all have small and medium-sized enterprises that make something in our constituencies. We all have credibility on this issue.
	My family came to this country as immigrants. They were engineers, specialising in gears. In May 1924, in the depths of a very bad recession, they set up Opperman Gears in a basement in Albemarle way in Clerkenwell. It had four staff—my great-grandfather and his three sons—who worked in the basement on two lathes, three milling machines and a couple of tools. They had borrowed £110 from a distant relative to set up the business. It grew rapidly and by early 1939 it moved to Newbury, where my family set up a larger firm that was able to produce the parts for the Wellington bomber with its long-term partner, Vickers.
	We do not run that company any more, but I should declare that I am a shareholder in the small manufacturing business run by my father and that my family members are involved in a number of different manufacturing businesses up and down the country. I should also make it clear that I resigned my directorship of the family business in 2009 and am not paid by it in any way.
	I should also declare that I am a whole-hearted supporter of my local manufacturing businesses in the north-east, notably Kilfrost, EGGER, SCA, Agma and others, and their financial support allowed the charitable functions I ran this summer in the constituency. I should declare an indirect link, in that a director of one of those firms made a contribution to my association.
	I hope I am doing my bit to try to create jobs. I was the second Member of this House to employ an apprentice and I urge those Members who have not to do so. She is a young lady who works in my office in Hexham and who has been with me now for nearly a year, and is doing extremely well. Members of all parties can take on apprentices—it is allowed under the rules—and I urge them to do it.
	The scale of the manufacturing deficit is huge. The nations that expanded post-war specialised in and pushed manufacturing. Those nations—Germany, Japan, Taiwan, Korea and China—knew what they were doing. Today, the services sector alone can prop up Britain no longer and there is a strong argument for greater industrialisation and changing things. We have seen the demise of manufacturing—it was 20% of gross domestic product in 1997 and is now 11%—and there is a strong argument for specialising not just in high-tech industry but in other industries, which are often derogatively labelled “metal-bashing”. Their products are unassuming, even if they are created by some of the most precise machines on the planet.
	My constituency is in Northumberland and my four biggest non-public sector employers are all manufacturers. The north-east might be the birthplace of ships and steel, but we have reinvented ourselves. I was pleased to see SCA recognised in the Government-backed “Made by Britain” awards, which were so ably organised by the hon. Member for Huddersfield. That company employs about 435 local people in Prudhoe, including 60 apprentices. It could not be doing any more to support its local community. It does not make glamorous, eye-catching products—or perhaps some people think it does—but it produces one in every five toilet rolls in this country, as well as vast quantities of paper towels. I am sure we all agree that those are essential products.

Graham Evans: Flushed with success.

Guy Opperman: It is, indeed, flushed with success, as my hon. Friend so ably quips from the sidelines—as always, he is on the money. The wood pulp goes in at one end of the factory and paper products come out the other. The machinery is highly technical; this is modern manufacturing in the modern age.
	In this time of austerity, I am extremely proud that the north-east has a positive balance of trade and is the only region consistently to do so. We should trumpet the fact that the North East chamber of commerce is the only regional chamber of commerce in the country. It represents more than 4,000 businesses and takes up more than 30% of the region’s work force. If I had to single out one local concern that it has highlighted to me from the multitude of things it would like to be done, it would be to urge the Minister to conduct the review that it is hoped will be undertaken of the planned carbon floor price and other climate change and energy-related matters.
	How are we to address the manufacturing deficit? I have three main suggestions. First, we need a Minister for manufacturing. That is not to decry the efforts of the Minister with responsibility for business or the Business Secretary, both of whom are worthy men, or those of any parties in that Department. However, the fact remains that, according to the House of Commons Library, there has not been a Minister for manufacturing since 1945.

Gordon Birtwistle: In my constituency, I get a lot of requests from local manufacturing companies for advice on various issues, mainly in relation to exports and where to go for help with them. Does my hon. Friend agree that a Minister with responsibility specifically for manufacturing would be a major asset to the
	Government and the manufacturers of this country? Businesses would be able to go directly to the person who could give them the answer they required rather than having to go through myriad Departments? People get lost in that process—even Ministers sometimes, I imagine—and if we had someone who could be accessed directly and who reported directly to the Prime Minister, that would be a major asset to the Government.

Guy Opperman: I completely agree. To put it in the vernacular, we need a go-to guy who is the one person looking after manufacturing.

Chris Ruane: Or a go-to girl!

Guy Opperman: Of course, it could be a woman—I accept that entirely. I was using the term generically. Such a Minister could provide co-ordinated responses to the concerns of manufacturing businesses. Having such a Minister would send out a message that this really matters. I challenge anyone to say that that is not a good idea. It is something that successive Governments have consistently failed to do, and I do not blame previous Governments for that, but doing it would send out a positive message for the future.
	The second issue I want to address is banking and the chronic deficit that every Member of the House must be facing in their constituency—a lack of bank financing for businesses. Every one of us, in every constituency surgery, will regularly have businesses coming to us and saying, “I cannot get the funding I need,” or “I cannot get the borrowing I used to have.” It is a chronic problem. Much good work is done by business angels and credit unions—those hon. Members who attend the debate on credit unions yesterday will know that very positive steps were discussed there—but when it comes to bank finance, the system of the main banks is clearly logjammed. What can we do about that?
	Currently, to set up a bank one needs £110 million-worth of assets—of cash, effectively—or the Financial Services Authority will not allow it. If the FSA relaxed that rule or changed the figure to £10 million, for example, then prominent local businessmen or businesses in a local community could set up a local bank.
	Traditionally, the problem has always been that banks go bust, as they did in the 1920s and ’30s, because they over-borrow and over-lend in effect. If there were a restriction such that they could not exceed the money held on deposit with the Bank of England, the only loss that could be sustained would be the funds in that bank. The effect would be true localism. Someone could set up the bank of Hexham—or, in the Minister’s case, the bank of Bognor—and that bank would be specifically focused on providing small and medium-sized enterprise lending to local businesses.

David Willetts: In my case, it might be the bank of Havant, rather than the bank of Bognor.

Guy Opperman: There could be competition throughout the region. That would not be difficult. Would it not be great if we had some competition among local banks?

Andrew Stephenson: In Pendle, a local businessman called David Fishwick is trying to do exactly what my hon. Friend suggests. He is trying to
	create his own bank to help small and medium-sized enterprises in Pendle and Burnley. The regulations are so detailed and engrossing that the FSA has refused to help him, despite his instructing high-flying lawyers. So far, it has even refused to meet him to discuss the creation of a bank that would directly help small and medium-sized manufacturers in Pendle and Burnley.

Guy Opperman: I will give way again.

Lorely Burt: The hon. Gentleman has obviously excited a lot of interest with his suggestion. Will he consider the American model of community banks, which have stood the test of time and served their communities?

Guy Opperman: My hon. Friend anticipates my next move, which is to say that such matters are already road-tested in other jurisdictions in other countries. Sadly, the FSA is reluctant to change its regulatory system. I have heard other examples of its failing to meet individuals who want to provide local financing—something that would be immensely good for local communities and could provide a flexible approach. Instead of being stuck with a loan from Barclays, for example, people would have a much lower flexible interest rate and adopt a much more interesting way to recuperate their finances at a later stage when the company was in profit. Banking would be local. We all know what happens when we are approached by a constituent when a business is in trouble. The decisions in relation to such financing are made not in Hexham or Newcastle or even in the north-east, but in a place such as Nottingham or Leatherhead or, ultimately, in London. That must change.

Mike Weatherley: Does my hon. Friend agree that the banks in his example would facilitate help for some of the failures in respect of the enterprise finance guarantee scheme? There are 4.8 million SMEs, but the Government are targeting only 6,000 of them with help through the EFG at the moment.

Guy Opperman: My proposal would provide an alternative way forward for the financing that those businesses clearly need. I suggest that the Minister take it back to the future Minister of manufacturing and the Treasury, with a view to trying to move forward. I am conscious of the time, so I will not take any further interventions.
	My next suggestion is an industry bank. We could extend the remit of the existing green investment bank to form a general enterprise bank, for which there are successful models in Germany and the United States. The German KFW—a product of Germany’s social market tradition—and the US Small Business Administration industry bank are specialists in long-term lending to SMEs, and they are effectively financed by their Governments, with a bottom line of commercial viability and social benefit.
	The blueprint also exists in this country. What is presently 3i, which is a FTSE 100 company, was originally the UK Industrial and Commercial Finance Corporation, which had tremendous success when it was set up. On practical realisation, given that we have quantitative easing, would it not be better, instead of investing all
	those sums in bank bonds, for some of that money to go into an industry bank, so that it would go directly to the people who need it most and who are creating the jobs and growth that we all want and need?
	I must conclude my remarks. I urge the Government to have a more pro-business policy. Others will talk of what the Government are doing and the positive steps they are taking, but I put in a plea for flexibility. There are repeated examples in my constituency of viable and successful businesses being penalised heavily for being a day late with their tax returns, or three days late with their VAT returns. Effectively, the Government are penalising those who are working the hardest to create the jobs that we need. I thank the House for its indulgence.

Barry Sheerman: My sincere apologies for arriving two minutes after the hon. Member for Hexham (Guy Opperman) started his speech, but I think I caught the gist of it. We have worked harmoniously in calling for this debate, and I am delighted that we are having it today, and that it is cross-party. The group of us who are associated with the all-party manufacturing group are very pleased about that. My interest in manufacturing has obviously been a total failure. I have been in this House for more than 30 years, and I started the manufacturing group not long after I got into Parliament. Ever since the original all-party manufacturing group started, our manufacturing sector has shrunk and shrunk, under all parties and all Governments.
	I represent Huddersfield, the cradle of the industrialisation of our country. Anyone who knows anything about my part of the world will know that even today it is a centre for the highest-quality wool textiles—super-100 and super-110 worsteds and so on. It is also very well known for its engineering, for David Brown gears and many other manufacturing companies, and of course for chemicals, which come from the traditional industry of dyestuffs for textiles.
	Huddersfield became an industrial town because of power. The energy coming from the fast-flowing streams from the Pennines—the Holme, the Colne and the Calder—attracted industry because that is what made the mills work. That is how we got industry in our part of the world. It was a manufacturing town. There was not much in Huddersfield; there was the old village of Almondbury, which is a bit of a market town, and an ancient place, but the modern town is 18th and predominantly 19th century. Some 70% of the population would have been in the manufacturing sector. We are now down to about 8.9% manufacturing employment in the constituency, whereas 86.7% of employment is in various forms of services; 33% is in health, education, or working for the local authority. We are lucky to have a large and successful university, Huddersfield university, which is pre-eminent in engineering, textiles and design innovation, but that does not disguise the fact that we are pre-eminently in the service sector; 87% of employment is in services of various kinds. Unemployment is at its highest level since I became a Member of Parliament.

Gordon Birtwistle: Does the hon. Gentleman agree that the collapse of manufacturing in Huddersfield, which has gone from 30% or 40% of employment to 8%, is significant given that youth unemployment is so
	high? Huddersfield’s colleges are training young people to be engineers and manufacturers, yet the collapse of manufacturing industry means that the jobs are not there any more for them to do. Manufacturing has been overtaken by the services sector. Does he agree that it is high time we reversed the trend towards the services sector and returned to a buoyant manufacturing sector, which could employ those young people?

Barry Sheerman: I would go 90% of the way with the hon. Gentleman, but I would not accept the word “collapse”, because we still have a vibrant, though much smaller, manufacturing sector in engineering and chemicals. The textiles, engineering and chemicals industries are still there, and have very high productivity, but the capability now is such that we turn out an enormous amount of worsted in a crinkly shed—not one of the magnificent old stone mills—that is working 24/7. I think we underrate the productivity of some of those industries.
	I do not want to make Members suicidal, but let us compare the decline of the UK’s manufacturing sector with that of other countries before moving on to something more cheerful. In Great Britain around 8.8% of employment is in manufacturing. Some figures for 2008 indicate 9.8% for manufacturing and 80.8% for services. Things are very similar, if not worse, in the United States, where employment in 2009 was 8.9% in manufacturing and 83.4% in services. The decline of manufacturing in the UK has very much gone in parallel with the experience of the US. By comparison, Germany still has 18.5% in manufacturing and 73% in services, and China has 27.8% in manufacturing and 53% in services.
	I want to draw the House’s attention to the UK’s balance of trade, particularly the trade deficit with Germany, which last year was £16.8 billion, and with China, which was £21.6 billion. Whatever is happening today, and despite the depressing interview with Chancellor Merkel last night, which persuaded me that we are on the precipice of a world recession, we must remember that Germany has been very fortunate and that the eurozone has been very kind to German manufacturers over this period, as has the renminbi, the Chinese currency, which the Chinese conveniently manipulate to give their manufacturing exports every possible advantage.
	I want to dwell on the future and what kind of society we want. It seems to me that we want a wealth-creating society that produces the goods and wealth that can then be shared. Some of us disagree about the levels of individual and corporate taxation, but we all agree that we have to produce the wealth in order to share it, whatever way we chose to do so. I am concerned that if we do not do something in the manufacturing sector we will not have very much to share.
	What do we depend on? A core element at every level of activity is the fact that in every facet of human experience success depends on the quality of the people who do the job, their skills and commitment and their desire to do a good job. In the 10 years that I chaired the Education and Skills Committee, that came home time and again. The history of our country is one of clever and skilled people with ingenuity, determination and a hunger to do something. We have had an amazing crop of entrepreneurs. At the heart of our manufacturing problem is the fact that too many people in our country who go to university do not go into manufacturing.
	I remember walking across the hallowed lawns of Magdalen college with the master some years ago. I asked him whether any of his graduates go into manufacturing or public service. He replied, “Oh no, they all go into the City.” If we continue to make the City and banking the profession of choice, we will be in even more trouble than we are in at the moment.

Pat McFadden: My hon. Friend is drawing attention to the place of engineering in academic ambition. Does he welcome, as a corrective to the problem, the recently announced Queen Elizabeth prize for engineering, a £1 million prize overseen by the Royal Academy of Engineering, which is designed precisely to elevate the status of engineering, creativity and innovation for the next generation of young people?

Barry Sheerman: I agree absolutely and was going to mention that. I was also going to mention the Aldridge Foundation and Rod Aldridge, who founded Capita. He puts a great deal of money into education and is absolutely obsessed with finding entrepreneurs and giving them a chance to become successful.
	We must ensure that there is reward for the risk of being an entrepreneur. We have to be open about the fact that that is what we want to reward. No one on either side of the House should fail to realise that. I do not mind seeing entrepreneurs getting super salaries. I have a great deal of sympathy with some aspects of the 99% campaign, but I do not mind people earning a great deal of money and being rewarded if they are entrepreneurs who produce jobs and wealth. I am worried when people in pretty safe and comfortable jobs, who are never going to risk anything, get millions of pounds a year. That is what I do not like.
	On skills and training, the STEM subjects are neglected in our country, and we need more young people to stay with science, technology, engineering and mathematics longer.

Tony Cunningham: Many engineering entrepreneurs, past and present, started out as apprentices, so does my hon. Friend agree that if we put more energy, resources, money and time into apprentices we might see more entrepreneurs?

Barry Sheerman: I absolutely agree, and I will come on to that issue.
	The slight disagreement between me and the Secretary of State for Education has occurred because I believe that young people who are not very academic but quite good at practical subjects will lose out on an opportunity if we remove design and technology as an option, focus on the more rarefied academic subjects and push the more hands-on subjects to one side.
	After the Tomlinson report, we lost diplomas, and that was the fault of the Blair Government, but the role of our universities is one thing that we can say is brilliant. If it was not for our universities, I would despair. They are increasingly working with entrepreneurs and the manufacturing hinterland, and that must be rewarded. We need more links between universities and further education colleges, of which there are about 450 in this country, and they really need to work much more closely, so that they turn out the young people
	that local industry needs. We should not pretend that all apprenticeships are three-year courses in engineering, because they are not; the average length of an apprenticeship is one year to 15 months, but they are not good enough; they are not proper apprenticeships.
	On design, anybody who wants to know or who cares about the creative industries should look at Sir George Cox’s review of them and their relationship with enterprise, innovation and manufacturing. If we were to ask him, “What is the one thing that could transform this country’s manufacturing success and wealth creation?” he would tell us, “It’s the supply chain and how this country and its Departments procure. At the very heart of making a great change, it’s procurement that will do it.”
	I could have covered other things today, but I finish on this point. In this country, we are still pussyfooting around competition. I have grown up to be a free trader, with the belief that we are a trading nation and should not have any barriers to trade, but I am changing my mind. I do not believe that this country, at this moment in time, with the imbalance in exports and imports between ourselves and Germany and China, can possibly accept the situation for much longer. Something pretty dramatic has to be done, especially when research increasingly shows that China, that wonderful, not very democratic industrial nation that is growing very fast every year, conducts a form of economic warfare against any area where it feels there is competition.
	Let us look at the way in which the Chinese seek raw materials, resources, minerals and rare earths. An expert from a university told me yesterday, “If you want to know who’s going to move into Afghanistan in 2015, it will be the Chinese, because Afghanistan has more of the rare earths that China wants than anywhere else.” The Chinese will be there in 2015, as they already are in Africa and throughout the world, and they also manipulating currencies and targeting specific industries in a way that we have only just begun to comprehend.
	So there is economic warfare, and it is about time that the Treasury, with other Ministries, was conscious of this: manufacturing matters in this country. We need skills and entrepreneurs, but we have to have fair competition with competing nations.

Several hon. Members: rose —

Nigel Evans: Order. As we are approaching the festive season, I will play an early Father Christmas and set the time limit at 10 minutes.

Graham Evans: I congratulate my hon. Friend the Member for Hexham (Guy Opperman) on securing the debate. Apart from a brief spell stacking shelves in my local Co-op in Poynton, I have worked in the manufacturing industry for my entire career. Interestingly, my first manufacturing job as a young man was working for BAE Systems on the mark 3 airborne early warning Nimrods. After a lot of taxpayers’ money, that was rightly cancelled because it was over budget and out of date and did not work.
	When Britain was described as the workshop of the world nearly a century and a half ago in 1870, the UK accounted for almost half—46%—of the world’s
	manufacturing output. Today, that title has been bestowed on China, which produced a fifth of the world’s manufactured trade in 2007. The term seems to have lost some of its meaning over time, as has the notion of Britain as an industrial nation.
	Everyone appears to believe that the UK is doing fine when it comes to manufacturing, citing the fact that we are the fifth largest manufacturer in the world in terms of value of output. That attitude has bred complacency and allowed successive Governments to believe that they are doing enough to maintain that position. However, that belies the truth. If we measure manufacturing in terms of per capita value added, we realise that Britain is only around 12th in the international league tables, and suddenly the picture changes dramatically.
	It is clear that if we are to rebalance our economy, much more must be done to push us up the rankings. That means providing support for all forms of manufacturing, rather than just the high-tech sectors that seem to be so fashionable at the moment. It has been calculated that those sectors make up only 14% of British manufacturing and it has been advocated that the support for manufacturing should be based on value, not the complexity of the product. For example, the UK still produces basic metal turbine blades, but they are cut by some of the most precise machines on the planet. The product is simple but very high value, thanks to the advanced production process.
	There is no question but that such a shift must take place. The financial crisis made most people aware that the UK cannot rely on the financial services’ trade surplus to prop up the industrial trade deficit. However, it is less well known that, according to the Office for National Statistics, even the financial sector’s maximum export volume of £55 billion in 2008 was eclipsed by manufacturing’s £195 billion of exports.
	The problem is twofold. First, our manufacturing ability is only rivalled by our insatiable appetite for other people’s goods. That has led to the latest trade in goods deficit of almost £100 billion—a new record. Secondly, Britain has grown complacent. Our manufacturing output has remained constant for the past 13 years under Labour, which is a reduction of £3.5 billion per annum in real terms.
	Where did it all go wrong for UK industry? Contrary to popular assumptions, although some deindustrialisation did occur under Margaret Thatcher, the bulk of the factory closures came later. Indeed, when Labour took office in 1997, manufacturing comprised exactly a fifth of the UK economy. By 2007, it had declined to an eighth. In comparison, under the whole of the Thatcher Administration, the decline was 3.3%. The loss of our manufacturing capabilities is a very recent concern, which should fill us with a certain level of optimism.

Adrian Bailey: So far, the debate has been conducted on a reasonable cross-party basis. However, given the fact that the hon. Gentleman has made a political assertion, can I point out that in the black country, at least four huge manufacturing employers—Round Oak steelworks, Patent Shaft steelworks, Bean Cars and Cannon—were closed during the Thatcher era? That had a devastating impact on the level of employment in the black country.

Graham Evans: I am grateful for the hon. Gentleman’s intervention. At the beginning of my speech, I made the point that all Governments of all political persuasions have contributed to the overall decline. I take on board the closures in his constituency. All Governments need to learn the lessons of the past, but that does not mean that we should underestimate the problem.
	Let us consider energy-intensive manufacturing sectors, which include the chemical, steel, glass and paper production industries among others. The chemical industry is of particular importance in my constituency, where Tata and INEOS Chlor are still major employers in Northwich and Runcorn. According to Waters Wye Consulting, policies such as the EU’s emissions trading scheme and the unilateral carbon price floor mean that the average energy-intensive company’s energy bill will rise from £3 million now to £17 million in 2020—an untenable level for the majority of these firms, which simply cannot afford to continue production in the UK. Proponents of these policies argue that energy-intensive sectors account for only 1% of GDP and so do not matter. If we quantify that figure, it equates to a potential loss to the UK economy of £15 billion and 290,000 jobs. More widely, the Royal Society of Chemistry claims that £220 billion of GDP and 5.1 million jobs are partly reliant on UK chemical research alone. Clearly, the visible threat to UK manufacturing is only the tip of the iceberg, but the problem is that most people do not realise that.
	British industrial decline, relatively speaking, is in sharp contrast to the experiences of our neighbours—in particular, Germany. German long-term support for manufacturing means that it now possesses the economic clout to dominate Europe. Given the UK’s and Germany’s widely different starting positions 60 years ago, it is clear that it has done something that we have not, and that something is valuing industry. From post-war restructuring to reunification, Germany has always recognised that manufacturing was the backbone of its economy and therefore never enacted policies that would endanger it. Indeed, political infrastructures were set up to nurture industry, especially mittelstand—or, as we refer to them, small and medium-sized companies or SMEs. Foremost among those tools stands KfW, the state-backed bank that ensures that mittelstand can access funding even when the commercial banks are unwilling to lend. The value of such an institution was seen in the financial crisis. According to its accounts, in 2010 KfW financed a record €28.5 billion for SMEs, amounting to approximately 94% of all its commitments for the year. Without KfW, the potential for many extra jobs and exports would have never been realised for Germany.
	It is hard to understand how far the value of German industry goes. Youngsters are encouraged from an early age to appreciate the importance of making things.

Gavin Williamson: Does my hon. Friend agree that one of the key elements of Germany’s success is its investment in research and development? We need to be encouraging that. Jaguar Land Rover is building a new factory in my constituency and investing in R and D, and the Government could go a long way towards helping that by reviewing R and D tax credits, which the Treasury is considering at the moment.

Graham Evans: I agree with my hon. Friend. We have a reputation for very good, world-beating research and development, but it goes beyond that—when we have discovered these things, we still have to ensure that we make them in this country.
	The Germans try to ensure that their young people appreciate manufacturing. Eliciting such a response from British children, compared with their counterparts in Germany, is increasingly difficult as they grow up. Initial curiosity about industrial work might be dismissed as selling themselves short by parents and teachers, and by the time the most able leave school, university is the only option, with apprenticeships considered by some to be second rate. The closest many of the next generation get to manufacturing is printing off a computer document. Little wonder that youth unemployment hit 1 million last week; many do not have the skills needed by manufacturers, thus further encouraging those manufacturers to relocate their businesses elsewhere, to the increasing detriment of British growth. As I have repeatedly said in this Chamber, we need to educate our children in a manner that will enable them to become the engineers, scientists and entrepreneurs that this country needs to pay its way in the world.
	With the average age of those in industrial employment at 40 and rising—50 in some sectors, such as chemicals—drastic action is required. British manufacturing is at a crossroads. It can grow, bringing jobs to those who need them and contributing to reducing the deficit, or it can decline further, with valuable businesses permanently lost. There is reason to believe that the former positive outcome is more likely if we commit to making it happen. The Government have made a strong start. That this debate is happening is hugely positive and shows that we recognise the seriousness of the problem. The solutions that we need involve major changes both culturally, in widening our appreciation for manufacturing, and practically, in creating a more positive environment for industry. Let us make it in Britain. Let us make Britain great again.

Pat McFadden: I have taken part in a number of debates on this matter over the years, including as a Minister in the previous Government and as an Opposition spokesman after the election. Such debates often follow a similar pattern. Labour Members talk about the great wave of industrial closures that happened in the 1980s. We had a flavour of that a minute or two ago. Government Members are tempted to say that manufacturing declined as a proportion of GDP under the Labour Government. It all gets a bit familiar. Whatever the rights and wrongs of those arguments, they are united by two things. First, they tend to look in the rear-view mirror. Secondly, they take little account of the huge wave of globalisation and the enormous technological advances of the past 20 years.
	Nobody can underestimate the importance to every developed economy, including ours, of the opening up of China as the factory of the world. To try to pin that on any single Government is to miss the point. No country is immune from its effects. Whatever product one makes, the chances are that it takes fewer people to make it today than it would have taken 20 years ago. It takes fewer people and fewer person hours to make a
	car today than it did 20 years ago. It is therefore not surprising that the number of people employed in these activities has declined.
	It is good that this debate is focused on the future of manufacturing. We should avoid the rear-view mirror stuff that sometimes characterises these debates if we can. Any honest debate about the future of manufacturing has to begin by acknowledging the power and reach of globalisation and the power of technology, rather than pressing the rewind button or taking us down a nostalgic tour of the past.

Tony Cunningham: There is a company in my constituency called New Balance, which is the only running shoe manufacturer in the United Kingdom. It sells its running shoes to China. It does that because of the quality of the product. Is that not the way to compete?

Pat McFadden: That is a good example. I know that my hon. Friend is a keen runner. In my more conscientious days, I have also done some running. New Balance is an excellent product. He shows that globalisation is a two-way street, not a one-way street.
	The emphasis on the past that sometimes characterises these debates can lead to an over-pessimistic discussion about decline and loss. Let us be honest: we make less than we used to, as is clearly shown by the figures. However, I also believe that we make more than we think and more than we sometimes give ourselves credit for. The point made by my hon. Friend the Member for Workington (Tony Cunningham) shows that and there are other examples. We still make about 1.5 million cars a year, most of them for export. We have heard news today that Toyota has again chosen the UK as the base for a new model, which I understand will create up to 1,500 jobs. We also have a hugely successful pharmaceutical industry with a strong balance of trade surplus.
	Although we had a debate earlier about British aerospace that centred on the loss of jobs, that sector as a whole is strong and is an important earner for us. Only this week, Goodrich, a company in the constituency of my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), won a contract to maintain landing gear systems for the United States air force. That company has already taken on 200 people this year, and it aims to keep hiring in the period to come.

Valerie Vaz: I thank my right hon. Friend for giving way and the hon. Member for Warwick and Leamington (Chris White) for securing the debate.
	May I bring the House’s attention to another success story, which is in my constituency? Chamberlin and Hill has actually won contracts back from China for making castings for turbo-charged engines.

Pat McFadden: My hon. Friend makes a very good point. Chamberlin and Hill is a company that I know well and a fine example of what the Germans would call a mittelstand—a medium-sized company—that is doing very well. What is its slogan? It is “Difficult things, done well”, I think, and it does indeed do them extremely well.
	As we heard a moment or two ago, we have all been delighted by the news that Jaguar Land Rover is to locate its new engine plant on the boundary of Wolverhampton in the constituency of the hon. Member for South Staffordshire (Gavin Williamson). That investment of more than £300 million will mean more than 1,700 new manufacturing jobs directly, but many more than that in the supply chain and indirectly in the wider economy. In a sense, Jaguar Land Rover is a microcosm of the story of globalisation. Its Indian owner, the Tata group, is investing heavily in new models that are being sold in a number of new markets, which are growing because there is a growing middle class keen to buy high-quality, prestige vehicles. That is also why it is hiring more workers in the constituency of the hon. Member for Solihull (Lorely Burt).
	I use those few examples to illustrate that although there has been decline and closure over the years—in my constituency we saw more than our fair share, with the closures of Stewarts and Lloyds, Sankey’s and many others some years ago—the story of manufacturing in the UK is not always one of decline and loss. We need to believe more in what we still make, and resolve to value more the activity of making things. In a short debate such as this, there is not much time to discuss the detailed policy prescriptions that might make that happen, but I should like to mention a few things that we could do to support manufacturing more.
	First, as I have said, we can challenge the culture of decline and loss. As a country, we should resolve to be the best place in the world for engineering. That might not mean that we are the biggest manufacturing economy in the world, but we should resolve to be the best place for it. That resolve should be shared by Government, our universities and our top companies, and it should fire the imagination of the next generation about the huge benefits that creativity, innovation and making things can bring.
	As we heard a few minutes ago, one positive step in that direction is the Queen Elizabeth prize for engineering, which has just been announced and which the Royal Academy of Engineering will oversee. The Royal Academy is right to emphasise that the benefits of engineering go way beyond pure manufacturing and contribute far more than we think to our wider economy. I personally believe that the boundaries between a rigid manufacturing sector and services are becoming outdated. Rolls-Royce, for example, talks about “manu-services” and about earning as much from maintaining and servicing products as from just making and delivering them. We need to do something about the national resolve on manufacturing.
	Secondly, we have to get tax policy right. I want to heed the advice of my neighbour, my hon. Friend the Member for West Bromwich West (Mr Bailey), not to be too partisan, but I say gently that I cannot see how cutting investment allowances helps the Government’s stated aim of rebalancing the economy, at a time when the life cycle of products is getting shorter. It is a £3 billion-a-year hit on manufacturing, to fund a corporation tax cut for banks and other businesses that do not always invest. It seems to me to run completely counter to Government rhetoric about supporting manufacturing. The Government should be making it easier for manufacturing companies to take investment decisions, not more expensive as that change to the tax system does.
	Thirdly, we need an active industrial policy. We have become too defensive of the accusation that the Government should not pick winners. There is nothing wrong with a nation looking at the changes that are to come—be they for a low-carbon economy or a more digitally connected world—and resolving that the UK must have the capacity to make the most of them. The Government are a big market player. That should be a priority not only for the Department for Business, Innovation and Skills, but for the Ministry of Defence, the Department of Health, the Department for Education and many other Departments. All should think about their budgets and activities in terms of industry policy, but far too often, they do not do so. The Department for Business, Innovation and Skills should not be the only bit of the Government that thinks about business and industry—thinking about business must be done far more broadly across the board.
	Finally, we ought to rethink our definition of making things. It is a touch old-fashioned in the digital age to think of making things only as making things that we can see or touch. Our country is a world leader in creative industries. The truth is that change has meant that people who might have become engineers or involved in manufacturing in the past are now making other things. Our TV formats are exported around the world; our football teams are watched around the world; the computer games that are developed and made in the UK are played around the world; and our musicians are listened to around the world. Everyone involved in those activities is also involved in making things, so our definitions have fallen behind the reality of the modern economy and what we as a nation are good at. Times have changed and creativity has been bent to new ends.
	If we think about making things in that broader sense, we will throw into sharp relief the sense of loss and decline that can characterise such debates. My plea is therefore to think about making things in the broader sense. What we need in future is both belief and action to back that belief. If we have those, we can make much more things in that broader sense in times to come.

Gordon Birtwistle: I congratulate my colleagues who called for this debate and thank the Backbench Business Committee for accepting and giving us a lengthy amount of time for it at short notice.
	The future of manufacturing products is inextricably linked to the future of manufacturing growth and wealth. If we have a strong manufacturing sector, we will have a strong economy that will create growth and prosperity for the country.
	I have a personal interest in manufacturing. I left school at 15—I did not pass my 11-plus or get any GCSEs—and went to be a craft apprentice at a local company in Accrington that manufactured textile machinery. That was an enthralling event. I had to go to night school three nights a week until I was 25, where I secured two HNCs. Unfortunately, that does not happen any more, but young people go into manufacturing and get other types of education.

David Willetts: I should like to assure the hon. Gentleman that I meet young people who are doing HNCs and HNDs at their local colleges to be trained to work in
	British business, including in manufacturing. We should take pride in the fact that people still get those qualifications, which are valued and recognised. Indeed, part of the Department for Business, Innovation and Skills commitment is to continue to recognise those qualifications.

Gordon Birtwistle: I am grateful to the Minister for that assurance and I hope that that continues.
	When I started in manufacturing some 53 years ago, manufacturing was 40% of the country’s gross domestic product and a balance of payments surplus was delivered every month. What on earth would the Chancellor think of having a constant balance of payments surplus now rather than the negative position we have? As manufacturing was so big, lots of apprenticeships were available through local companies that delivered the products that the country needed. The unemployment rate for young people was very low. When I left school, I applied for many apprenticeships throughout Lancashire. Most young people with whom I went to school achieved an apprenticeship in some industry or other. The vast majority of people in those days did not go to university; many people would have liked to have gone, but they could not, so they spent their time being apprentices and learning skills in the old-fashioned way by making things and having a trade.
	I do not want to make this political, but I have to point out that under the last Labour Government, manufacturing fell from 22% to 11%. Even Mrs Thatcher did not achieve such a drop—she only managed to get it from 25% to 21%. Manufacturing has a number of variables to overcome. They include how the industry is perceived by young people, the lack of skills, and the lack of investment and of research and development. One of the biggest challenges to manufacturers in my constituency is finding enough skilled workers to carry out the incredibly technical jobs that are available. More must be done to change the image of industry to make it attractive to young people. I know that those who undertake skilled apprenticeships will end up with great jobs working on interesting projects, earning decent salaries and probably with a job for life.
	A lot of damage has been done over the past 10 years to the image of manufacturing and vocational courses. A priority for the Government and for our successful and well-known manufacturers is changing the perception of manufacturing, especially among the young. We have become a country relying on a fragile financial sector and on the service industries. If young people were asked what they thought manufacturing was, they would probably respond that it is dirty and grimy. That is not the case. We need to show young people that there is more to manufacturing—that it is about maths and science, about design and innovation, about robots and computers. Manufacturing and technology in the food industry, for example, are phenomenal. There are so many different areas in the manufacturing sector and they are all innovative and exciting sectors to work in.
	Controlling the supply side of our skills deficit is but part of the problem. As important is ensuring that both new entrants and existing employees in manufacturing are sufficiently upskilled to meet the demands of British employers. The preparation work needs to begin in schools. We know, for example, that pupils who take three separate science subjects at GCSE are more likely to study science, technology, engineering and maths
	later in their educational careers. If we can tackle the problem at source, and improve the rigour of the subjects and the number of pupils studying them, it will have a cumulative impact on the calibre of graduates entering the job market.

Lorely Burt: Does my hon. Friend agree that a great way to get youngsters more excited and involved is to have closer collaboration between employers and schools, so that children can see what it is they aspire to do, and therefore choose to take the subjects to which he refers?

Gordon Birtwistle: I totally agree with my hon. Friend and I will come on to an initiative in my constituency related to that suggestion.
	In my constituency we have Burnley college, a joint FE-HE campus working with local firms to train highly skilled youngsters to be ready for the world of work. We are also getting a university technical college that will bring young people into the industrial life. Burnley college has made huge leaps in changing the perception of manufacturing locally among young people, and if the model the college uses were introduced across the UK, it would go a huge way towards really changing the perception of manufacturing at a national level. More schools and colleges need to start joining up with local businesses to provide youngsters with the knowledge and experience that will help them in the world of work. Too many children do not have any experience of working, or of the personal and other skills required. I will continue to encourage the Government to introduce impartial careers advice from the age of 11. Indeed, we should start careers advice long before young people go to secondary school.

Graham Evans: Is the hon. Gentleman aware of the Manufacturing Institute’s Make It campaign, which is specifically designed to enable young people in what used to be year 3—now year 9, I think—to experience as they take their options the delights of working in the manufacturing industry?

Gordon Birtwistle: Yes, I am aware of that, and it is a great thing. I encourage the Government to encourage such things, and we should also give careers advice to young people at 11.
	Manufacturing must cease being perceived as a career avenue for low achievers, and the Government must work harder to ensure that perception and reality are closely matched. The culture in our schools must change, and the Government can help with that. There is so much emphasis on how many children can get to Oxbridge but there is never a fanfare about how many get on to high-skilled training programmes in the manufacturing industry, such as those with Rolls-Royce, BAE Systems or Aircelle in my constituency. Business must recognise that a new role is emerging, and UK manufacturing must ensure that it sells its career and employment possibilities to young people.
	Trade finance also plays a huge role in the export cycle, but small and medium-sized enterprises often find raising the finance overly complex because of the myriad requirements on both financial institutions and Government agencies. The manufacturing industry in Burnley would like the Export Credits Guarantee
	Department to work more with financial institutions on initiatives to support exporters, particularly small businesses, many of which would love to export but find it difficult. For example, What More, an SME in my constituency that makes plastic buckets, washing-up bowls and lunch boxes that are sold widely in Tesco, is taking on the Chinese. The Chinese used to control that market but the company now exports to 38 countries, including China, and would like to export further afield. What More tells me that with an export credit guarantee it could export to another 25 countries. It employs 160 people and has invested £16 million over the past few years.
	It is critical that the Government, as a big purchaser of manufactured goods, buy British-made goods. I was extremely disappointed by the decision on the Thameslink contract. I do not know how it happened. I was not a Member of Parliament during the consultation and quotation on the Thameslink trains but I was concerned that the contract was placed with Germany. I do not understand the European rules but I was extremely concerned. Importing trains when we make our own does not stack up. I am pretty sure that the Germans and the French do not import their trains. They seem to find a way around these rules to ensure that the same does not happen there. Furthermore, a £1 billion order for Chinook helicopters was sent direct to Boeing despite there being a helicopter company in this country with a licence to build Chinooks. That would have saved us £500 million on our balance of payments.
	I have a couple of suggestions for the Minister. First, we should return the capital allowances scheme to enable companies to invest and get the capital allowances on the new equipment that they buy. There would be a massive investment in new plant and investment if the capital allowances were returned. Secondly, as my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) said, tax rebates on research and development should be increased in line with the rest of the world and with what is needed in this country.

Adrian Bailey: My constituency borders that of my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), so if my remarks echo his it is because of our shared experience of black country manufacturing and the challenges that it faces. My constituency, consisting of Oldbury, Tipton and Wednesbury, was at the heart of British metal-bashing for centuries. When Britain was the workshop of the world, the black country was the centre of that. It has a proud manufacturing tradition, and I am equally proud to say that, even given the hard times that the industry has gone through, there are still more foundries in my constituency than in any other in the country. The number of people employed in traditional manufacturing, while nothing like what it was, is still higher than in most areas of the country. My constituency is thus second to none in having an interest in the particular theme of this debate.
	I know that many people, particularly within the black country business community, welcome the Government’s rhetoric on boosting manufacturing, rebalancing the economy and securing export-led growth. I certainly share both the Government’s and the local business community’s enthusiasm for all of those. I think, however, that we need to measure this with a touch of realism.
	My right hon. Friend the Member for Wolverhampton South East made it clear that although we might want to extol the virtues of manufacturing, we must not do that to the detriment of the contribution made by other sectors of the economy, particularly our creative industries, which are world leaders and provide a significant proportion of our national output and a large number of employees. This applies to our service industries as well. Although manufacturing might have declined relatively, that is partly because we have an expertise in the service industries that is recognised throughout the world and provides potentially exportable market opportunities.
	Manufacturing has a crucially strategic role. Although it provides something in the region of only 11% of national output, it provides nearly 50% of our exports. If we are to export our way out of recession, the service industries might play a significant part, but we cannot overlook the potential of manufacturing industry. It contributes something like 74% of research and development. The more R and D there is, the more competitive we become: the two are crucially linked.
	We must recognise that without having more R and D and without providing a higher value-added manufacturing base, we might not be able to generate the levels of employment that we have had historically in manufacturing. We might well pursue policies to help businesses expand manufacturing as a proportion of our national output, but that might not necessarily result in a huge increase in the number of people employed because as we become more competitive and productive, we might be using fewer and fewer people to achieve it. That can sometimes blur the distinction between manufacturing employment and service employment—hence the reference of my right hon. Friend the Member for Wolverhampton South East to “manu-services”. Increasingly, as our high value-added manufacturers export abroad, they follow it up with service contracts, which provide a lot of employment for people who are technically in a half-way house between servicing and manufacturing.

Barry Sheerman: I know that my hon. Friend, as Chairman of the Select Committee, has a great deal of knowledge on this subject. I wonder, however, whether we are avoiding the fact that Germany is also good at services and at design and many other things, yet it still has a manufacturing base that is twice as big as ours. That is why I keep coming back to “It’s Germany, isn’t it?” that we need to copy.

Adrian Bailey: My hon. Friend is quite right—for a whole range of reasons that, unfortunately, time constraints prevent me from developing. Germany has a far stronger manufacturing base than we do, and a much stronger manufacturing culture throughout the country. I would like to discourse at length on that, but time constraints prevent me from doing so.
	Notwithstanding the German experience, it is generally recognised that our expertise in some of the service industries may well give us greater export opportunities to countries such as China. Because of Germany’s expertise in manufacturing, it has done very well in what we might term the first wave of exports to China, but we may do better now because of our superiority in some service industries.

David Morris: I serve on the Science and Technology Committee and we recently examined how the Germans fund their new technology infrastructure. They have the Fraunhofer institutes, which have been running for more than 100 years. We are now trying to emulate that through the Turing centres. German manufacturing is good, but ours could be equally good, if not better.

Adrian Bailey: That issue was recognised by the previous Government, and measures were being put in place to replicate that approach in the context of the British industrial scene. The current Government are, to their credit, taking that up.
	Bank lending is a hugely significant issue for small and medium-sized enterprises in my constituency and nationally. The Merlin targets are not being met. That, combined with low consumer confidence and low business expansion expectations on the basis of the domestic market, means that companies are not applying for loans because they do not feel positive about future market opportunities and because they are wary of the banks making their credit lines even more difficult than they already are. That is having a stultifying effect on the ability of small businesses to expand.
	Quantitative easing in order to address that issue may, indeed, keep interest rates low, but I have yet to meet a bank that knows how that will help SMEs directly, and I have yet to meet a business that knows how it would make any difference to its relationship with its local bank. Although lower interest rates may be welcome in general, that will not necessarily feed through to more investment into small businesses. I am concerned that the effect low interest rates are having on pension fund incomes could lead to some manufacturing businesses having to pay more into their pension funds, thereby diverting money from other areas in order to sustain their pension levels. This could be a counter-productive step, therefore.
	There is now a lack of provision in the crucial area of small grants and loans for small businesses that want to expand to take the market opportunities that will be available to them. The regional development agencies will not be reintroduced—that is a debate for another day—but they did provide small loans to businesses that wanted to expand. Those loans are gone now, and they are not being replaced by the banks. The regional growth fund is not yet delivering for small businesses. If we are to expand the capacity of manufacturing SMEs in the time that they have available to make an impact on employment, that vacuum needs to be filled. Either local enterprise partnerships must be given more powers or the RGF needs quicker and more localised means of distributing money.

Guy Opperman: Will the hon. Gentleman give way?

Adrian Bailey: No; I am sorry, but I am running out of time.
	I reiterate the points made about research and development tax credits and capital allowances—they might go some way to dealing with that problem. As they have been mentioned, I will not repeat the discussion of the issue.
	The second issue to address is skills. As has been said, Tata has invested £300 million in Jaguar Land Rover in a site to the north of Wolverhampton, with enormous employment potential locally. The concern within the industry is that the extended supply chains of small and medium-sized enterprises that could service JLR may have a shortage of skilled apprentices, and I have already mentioned the potential need for capital investment to improve the capacity to meet the demand from JLR. I have no doubt that JLR will attract all the people it needs, because it is a high-paying iconic company that is very attractive to everybody. It will be the SMEs in the area that will need to recruit, and we need to expand our vocational skills base to ensure that that happens.
	The Government have rightly concentrated on apprenticeships. However, there is emerging a picture of apprenticeship provision that will not necessarily address that need. First, a high proportion of the new apprentices are over 24, and there is considerable concern that these are just Train to Gain people rebadged. There is nothing wrong with Train to Gain, because it has an important role to play, but it will not necessarily meet the skills need that it is directed at. Secondly, there is increasing evidence of private providers coming in with short-term courses, which do not meet the historically longer-term need for training in a particular industry to meet capacity. I believe that the black country local enterprise partnership is examining the issue to try to scope out the skills provision that will be needed and ensure that it is provided. That LEP will be able to its job far more effectively if the Government were prepared to back their localism agenda by providing it with the resources to assess the skills need and to deliver on it locally.

Several hon. Members: rose —

Dawn Primarolo: Order. I am keen to make sure that every Member who has indicated a wish to speak in this debate—

Chris White: rose—

Dawn Primarolo: You may sit down, Mr White, as I will not forget you and you do need to know this before you start speaking. I am going to change the time limit, because if we have 10-minute speeches, we will not get everybody in. I am therefore reducing the time limit to eight minutes per Back Bencher from you onwards, Mr White. However, you have the great joy of being called next, so the Floor is yours.

Chris White: Thank you very much for that warning, Madam Deputy Speaker.
	May I, too, start by thanking the Backbench Business Committee for securing time for this important debate? As co-chair of the Associate Parliamentary Manufacturing Group, alongside my friend the hon. Member for Huddersfield (Mr Sheerman), I have a particular interest in this area of policy. I was pleased to hear from earlier speakers who were able to bring their own experience to this debate, for example, my hon. Friend the Member for Hexham (Guy Opperman) and the hon. Member for Burnley (Gordon Birtwistle). I am also pleased that
	Westminster is being visited today by the leader of my local district council, who also has a background in manufacturing industry. Perhaps it would not hurt too much if more Members of Parliament had a background or personal experience in manufacturing, engineering or industry itself.
	If we do not secure both a rebalancing of our economy towards manufacturing and growth in the sector, the UK will be very much the weaker, not least in my constituency, which is home to names such as Ford. Things have changed very much over time. My area has one major manufacturing works; the reason why we no longer have soot on our food is because Flavel, which won an award at the Great Exhibition, managed to change that by an innovative process and, to this day, the factory is still producing cookers in my constituency.
	As the right hon. Member for Wolverhampton South East (Mr McFadden) said, we need to look forward. What does a prosperous manufacturing sector need? It needs a large skills base, a strong communications network, a focus on exports and the opening up of new markets. There has been progress on the first point. In Warwick and Leamington, we have 210 additional apprenticeships compared with last year. Great thanks must go to places such as Warwickshire college for managing to secure that.
	Young people need to be encouraged to make a positive choice to take up careers in manufacturing. As the hon. Member for Huddersfield said, if that is to happen, design and technology must play a much greater part in our schools. We need to build on it through our entire education system. We cannot just wait until young people are 16 before they begin thinking about careers in the sector—it should thread right through our education system.
	We cannot afford to fall behind other countries in this vital area. We should be under no illusion: competitors like China and India will be doing more, not less, to educate their young people in those subjects. The national curriculum is under review and I hope that the Department for Education will consider the importance of design and technology for the future of our economy and work with organisations such as the Design and Technology Association to ensure that D and T remains at the heart of the curriculum.
	I believe that if we are to see long-term progress for manufacturing, we need the Government to be at one with the sector as a whole. Given the importance of manufacturing to our economic future, it makes sense that, as has been mentioned, the Government should create a dedicated Minister for manufacturing and I would support the creation of such a Minister.

Barry Sheerman: Does the hon. Gentleman agree that if that Minister for manufacturing was linked to a clear long-term strategy for manufacturing, that would be even better?

Chris White: I very much agree. A Minister and a strategy could go hand in hand.
	We need a strategic vision for manufacturing, with measurable targets of success so that we can see how our efforts at rebalancing our economy make headway and whether more needs to be done to help the sector. A Minister for manufacturing, tasked with creating a
	cross-departmental manufacturing strategy with targets and measurement tools to plot success or failure, would be a good start.
	The Government, for example, could make it their goal to boost manufacturing to 15% of our GDP by 2015. This “15 by 15” target would send a powerful signal and boost confidence in the manufacturing sector as a whole. The mere creation of a Minister and a strategy will not bring about growth and jobs, but it will signal the Government’s intent, give manufacturers a voice in the decisions on economic policy, better co-ordinate Government manufacturing policy and ensure that manufacturing is properly considered across all Departments.
	The UK is now the ninth biggest manufacturer in the world, unfortunately down two places on the previous year. We need to recognise that although we need to promote high-tech manufacturing we cannot ignore the rest of the industry. To quote a recent report,
	“‘low-tech’ does not mean ‘low-value’”.
	A Minister with responsibility for all manufacturing could ensure that it was not ignored and that we had a strategy in place that benefited all manufacturers.
	If we are to remain at the forefront of manufacturing globally, businesses need to be able to access the funds that they need to compete and grow. I therefore also support the creation of a bank for industry, similar, perhaps, to the green investment bank. We should not be content to allow Britain to slip down the league any further and we should make it our goal to climb back to the top of the table.

Nick Smith: All too often, the issue of defence management is sidelined, so it is good that we discussed BAE Systems earlier. I see this debate as an opportunity to emphasise the importance of defence manufacturing and procurement, which a colleague mentioned earlier.
	I have been lucky enough to be a member of the Public Accounts Committee for the past 18 months, during which time we have focused partly on questioning top Ministry of Defence officials, making defence one of our Committee’s themes and, crucially, visiting our country’s manufacturing base by going to Govan in Glasgow and Rosyth in Edinburgh where our new Queen Elizabeth-class aircraft carriers are being built. In doing that work, we have considered a number of instances in which the MOD has not secured value for money in procurement. I raise those instances today because I think they undermine our manufacturing capability and make the work of our armed forces much more dangerous.
	As a country, our priority should be to provide our troops with the equipment they need for the best possible value for money. Having a sustainable skills base is vital for that. In Britain, we have a thriving defence manufacturing industry, as I saw for myself at this year’s Defence and Security Equipment International exhibition. We have skilled engineers and fantastic research and development skills. Under the previous Labour Government, firms such as BAE had the opportunity to invest as the defence budget increased by 10% in real terms. The defence industry provides valuable exports for our country, as well as important skilled jobs. Having the latest technology can also be valuable as it gives our troops an edge on the battlefield.
	What are the key figures? Defence spending has been cut, meaning we have £2.63 billion less to spend on our military over a five-year period. This leaves 7,000 fewer members of our armed forces needing armour, four fewer frigates to equip and 40% fewer Challenger tanks to arm. As a result, we cannot afford to sustain our domestic capability to produce the kit we need. Last year’s strategic defence and security review was criticised by the Select Committees on Defence and on Public Administration. It was seen as a tug of war between the Ministry of Defence and the Treasury.
	Cost-effectiveness is important. Initially it was hoped that the decision to change the type of aircraft flown from the new aircraft carriers would save money. However, it has resulted in a multi-billion pound refit for the carriers because catapult and trap technology have to be added. That type of indecision can rapidly increase costs for manufacturers and, ultimately, for taxpayers. It also means that we will not have carrier capability until 2020 and that the carriers will not be fully operational until 2030.
	The best way to ensure value for money in procurement is by ensuring there is genuine competition in the tendering process. One way in which the MOD has discouraged competition is by gold-plating its procurement plans. Yes, our soldiers should have the best equipment, but that can lead to delays and leave our soldiers without the kit they need for a very long time. Competition is key in achieving value for money in defence manufacturing. Competitive tendering has been the Government’s aim, but National Audit Office figures show that fewer than 20% of the current major projects nearing their service date were awarded through genuine competition. Some 40% of contracts, representing £8.7 billion a year—these are big numbers—have been awarded by single-source procurement, under which the MOD invites only one firm to tender. There is a danger that by excluding firms from the tendering process we are reducing our skills base and our capacity to produce certain equipment in the long term as firms build up monopoly status.
	In conclusion, the best way for us to maintain domestic manufacturing capability is to have a number of firms with the ability to produce the equipment we need. That would protect more jobs throughout the industry, enable us to achieve better value for money and provide an incentive for firms to produce good-quality equipment on time. The point about being on time is particularly important. In future, both Government and industry must work to ensure that we have sustainability in our domestic defence manufacturing industry. Then we will better protect and arm our brave servicemen and women.

Andrew Stephenson: I am delighted to contribute to the debate and I pay tribute to the hon. Members who helped to secure it. Some very interesting points have been made. I have already spoken to my hon. Friend the Member for Hexham (Guy Opperman) about individuals’ being able to set up their own bank, and I know that we have constituents who share the desire to diversify lending to small and medium-sized enterprises in this country. The debate has already been very productive.
	In my maiden speech, I said:
	“I am proud to represent a seat with a higher proportion of the work force employed in manufacturing that than in any other
	constituency in England, and I am delighted that manufacturing is back on the national agenda.”—[
	Official Report
	, 17 June 2010; Vol. 511, c. 1108.]
	In the short time that I have today, I should like to consider what has been achieved in the 17 months since I made that speech and what more can be done to support manufacturers, particularly in Pendle and east Lancashire.
	A couple of weeks ago, I was delighted to attend the Lancashire Telegraph business awards. It was a night that helped to highlight the best of manufacturing and engineering in east Lancashire, when the prestigious business of the year award passed from one Barrowford-based company, ACDC Lighting, to another, Merc Engineering, both of which are located in my constituency. I have visited those companies, which are both tremendous examples of fast-growing smaller firms that are constantly innovating, winning new orders and expanding their operations.
	In Pendle, those companies are not the exception to an otherwise gloomy manufacturing picture. There are other businesses, such as Protec in Nelson, which has just installed all the fire alarm systems for the Olympic games stadium and venues; Hope Technology in Barnoldswick, which produces top-of-the-range components for bikes used by the best cyclists; and Kirk Environmental in Nelson, which is a leader in green technology. I have enjoyed visiting all those local manufacturers, as such businesses drive the local economy and will get the British economy out of the state it is currently in.
	As Pendle’s MP, my No. 1 priority is jobs and supporting our local manufacturers. As someone who ran my own small business until I was elected to the House, I understand the pressures that companies are under in these tough economic times. Last autumn, the Government launched the £1.4 billion regional growth fund, which has directed investment towards many manufacturers in Lancashire and the north of England. Particularly important to Pendle is the £8.8 million to reopen the Todmorden curve—a transport improvement that residents of east Lancashire have been calling for for more than 40 years.
	The Government have also agreed to fund the Regenerate Pennine Lancashire bid for an additional £7.5 million in business support. Its Accelerating Business Growth in Lancashire scheme is designed to meet the needs of local manufacturing SMEs by offering them capital investment for expansion projects, including premises, plant and machinery. There was a successful bid from North West Aerospace Alliance, which I shall meet again in a few weeks’ time.
	Those regional growth fund announcements came just two weeks after the Government said that they would back the bid from the Visions Learning Trust to open a new £18 million university technical college in east Lancashire—a huge investment in ensuring that our young people have the skills that employers are looking for. That is great news on top of new figures showing that 810 people have taken up apprenticeships in Pendle in the past 12 months—a 70% increase on the number in the last academic year and a bigger proportional increase than in either the north-west or the rest of England.
	All this comes on top of policies such as cutting corporation tax and red tape for manufacturers, promoting exports and getting the banks to lend more money, but
	there are some areas where I believe that Ministers could perhaps go further, a crucial one being support for the aerospace sector. I am delighted to have just been elected as treasurer of the new all-party parliamentary group on aerospace. Aerospace is crucial to Pendle’s manufacturing base. The UK aerospace industry is the second largest in the world. It is worth more than £23 billion and employs thousands of people in Pendle in highly skilled jobs, working for firms such as Rolls-Royce, Euravia or Weston EU. That sector of the economy is vital to Pendle and growing in terms of orders and jobs, but the long-term future of the aerospace industry in the UK cannot be secured without a long-term commitment to research and development. Ministers are already working closely with trade organisations such as ADS on the issue. I hope that the Minister will propose specific policies to help the aerospace sector.
	Another issue that I should like to discuss is empty property rate relief—a problem that, of course, stems from the previous Government’s reforms. It has been raised with me time and again by manufacturers in my area. John Getty, the managing director of PDS Engineering and the president of the East Lancashire chamber of commerce, recently singled this out as the biggest concern to many local businessmen. In east Lancashire, industrial unit after industrial unit has been pulled down because owners simply cannot afford the rates on old mills and buildings. The effect, when some of the small and medium-sized enterprises that I mentioned look to expand, is that there will be nowhere left for them to do so. I have written to Ministers on the issue many times. I appreciate that the Government have prioritised rate relief for small businesses for the time being, and that benefits more than 1,000 small businesses in a constituency such as mine. However, on behalf of the east Lancashire manufacturing community, I ask that the issue of empty property rates be looked at again in the near future.
	In conclusion, with the exception of the two key issues that I mentioned, the Government have, over the past 18 months, made huge progress in supporting manufacturing, through their approach to investment in infrastructure, grant funding, taxation policy, skills and apprenticeships. Solid foundations for our economic recovery are being laid.

Chris Williamson: I congratulate and thank the hon. Members for Hexham (Guy Opperman), for Warwick and Leamington (Chris White), and for Burnley (Gordon Birtwistle) and my hon. Friend the Member for Huddersfield (Mr Sheerman) for securing the debate. I have been greatly encouraged by the quality of the debate and the consensus across the Chamber. It gives me some hope that manufacturing does have a future after all.
	This country has a wonderful manufacturing heritage, and the constituency that I represent in Derby was the cradle of the industrial revolution. It is home to the world’s first factory, and to Rolls-Royce and Bombardier—the railway industry has a great heritage there. Just outside the city there is Toyota, which is one of the biggest, if not the biggest, car manufacturer in the UK today. We have a great manufacturing base, a great heritage, and a great reputation in this country, and particularly in Derby, for high-tech manufacturing skills. Promoting manufacturing as an occupation of first
	choice for our young people is key. We need to do more to encourage young people with skills to go into manufacturing rather than the service sector or finance, as they have done.
	I was encouraged by the Prime Minister’s commitment to rebalancing the economy in favour of manufacturing industry, and was particularly pleased when he brought his Cabinet to Derby to emphasise that commitment, but there was a rebalancing of the economy in the 1980s. The Government of the day turned their back on manufacturing to some extent and used financial services—the big bang in the City—as an alternative engine of economic growth. We were fixated on the financial services industry for far too long, and when the crash came we were over-exposed as a consequence.
	The Government have recognised, perhaps rather belatedly, the importance of manufacturing, and it is important that they demonstrate their commitment to it. I reiterate a good point made by the hon. Member for Pendle (Andrew Stephenson), who is the new treasurer of the all-party group on aerospace—I am its newly elected secretary, so we are certainly singing from the same hymn-sheet on that issue—about research and development. As the autumn statement approaches, it is absolutely key that the Chancellor seizes the opportunity to demonstrate the Government’s commitment to manufacturing and aerospace.
	The UK is the second biggest aerospace centre in the world. If we are to retain that position, the Government need to demonstrate their commitment to aerospace through investment in, and support for, research and development. Although Rolls-Royce has its roots in Derby and is the city’s largest employer—indeed, in the past 12 months it has recruited 900 additional members of staff, which is extremely welcome news—it is, in the end, a global company, and has factories in all four corners of the world. We must not be complacent, and I reiterate the point made by the hon. Member for Pendle on research and development.
	The other thing the Government must get right is procurement. I cannot contribute to a debate such as this without mentioning the Government’s decision to appoint a German company as the preferred bidder to build the Thameslink rolling stock, rather than Bombardier. It is not too late to revisit the decision, as they are only at the preferred bidder stage and, despite Minsters’ protestations to the contrary, the invitation to tender documentation gives the Secretary of State the opportunity to stop the process and retender. There is no reason why the retendering process would take two to three years, as he has suggested, because the procurement of new trains before and after privatisation was carried out in just six months.
	I urge the Government to reconsider their decision, even at this late stage, because although smaller contracts will hopefully come Bombardier’s way, such as those for Southern trains and the eVoyager carriages, we could still lose the ability to design trains in Derby, and if we lose that we lose the ability to design trains in the United Kingdom as a whole. Winning those two smaller contracts might put off the day when Bombardier pulls out of the UK, but it might not secure the train-building industry long into the future. It is absolutely key that the country that gave the world the railways continues to be able to build the trains that run on British railway lines.
	Hon. Members on both sides of the Chamber, myself included, have mentioned globalisation. Globalisation can be a threat or, as I prefer to see it, an opportunity. We need to seize the opportunities presented by growing markets in China, India, Brazil and other parts of the world. Although we should not seek to compete on low wages, we should seek to be ahead of the game when it comes to the high-tech skills that this country has in abundance. We must nurture those skills and invest in them through research and development and investment in education, by encouraging young people to go into manufacturing and by looking not only at the opportunities available through support for our the railways, aerospace and other existing industries, but at climate change as another opportunity. Engineering skills could be the salvation for tackling climate change and creating huge new employment opportunities in our country through geo-engineering solutions, which are being spearheaded by the Institution of Mechanical Engineers.
	I am fairly optimistic and delighted at the cross-party support we have seen today. I hope that Government Members will use their influence to persuade the Government to invest in research and development and reconsider their decision on the Thameslink rolling stock programme.

Jessica Lee: I am delighted to participate in this extremely important debate and thank the hon. Members and colleagues who secured it. I also thank my hon. Friend the Member for Hexham (Guy Opperman) for his fine opening speech.
	The constituency of Erewash, which I have the honour of representing, is in the heart of the east midlands manufacturing base. The east midlands has the highest employment level in manufacturing in the United Kingdom. We have been manufacturing products in Erewash for over 300 years. It is the base for one in five of the 2,400 firms in my constituency. To put it another way, 30% of the jobs in Erewash rely on the manufacturing sector.
	The range of products is also diverse, and it has developed as the technology has changed over the years. We have made everything in Erewash, from pencils to lace and drainage covers to railway carriages—the list goes on. Indeed, the town’s contribution to manufacturing has continued in peacetime and wartime. At the Stanton Gate works, 873,500 bomb casings were produced during world war two, and my late grandfather, who grew up and worked in nearby Nottingham, was an engineer on the local railways all his life and one of the many engineers asked to help in factories throughout the war, producing, making and helping us to win world war two.
	One industry with a proud legacy in Erewash, especially in the town of Long Eaton, is furniture making. In recent years, there has been a resurgence in the trend for Union Jack-themed home accessories and furniture, and I confess that in the Lee household the occasional Union Jack cushion has appeared from time to time, but to me it is a great symbol, because it shows that we support British products and furniture makers, such as Meadowmead in Long Eaton. I am an active member of the all-party group on the furniture industry, and I will continue to do all I can to support the industry.
	High-tech engineering and educational suppliers are also successful. We have companies such as TecQuipment, which provides sophisticated engineering training products that are then exported to universities around the globe. We also have Atlas Composites, whose carbon composites are used by top companies, also around the globe.
	Being located between Derby and Nottingham, Erewash is a significant supplier to larger companies such as Rolls-Royce and Bombardier, and I note the comments of my hon. Friend the Member for Pendle (Andrew Stephenson) and am delighted to hear about the recently formed all-party group on aerospace. If an application form is sent to me, I shall happily join that group, as it is important.
	Through the Industry and Parliament Trust, several MPs recently visited Rolls-Royce. It is an extraordinary site, and I encourage all Members to go. The hon. Member for Hartlepool (Mr Wright), who is seated on the Opposition Front Bench, also attended, and that day everybody was completely mesmerised and impressed by the company’s workmanship, expertise and groundbreaking work.
	Indeed, Rolls-Royce is responsible for 2% of the nation’s GDP, and through its encouragement of apprenticeships and its employment, in particular, of skilled graduates from around the globe it has created a fantastic working environment. For the overwhelming majority of employees, once they start working for Rolls-Royce they simply do not want to work anywhere else, a fact that is reflected in the small number of people who ever leave.
	The lace industry has also been important in Erewash, and I have spoken about it several times in the House, but I cannot let this opportunity go by without mentioning again Cluny Lace in Ilkeston, the last traditional lace manufacturer in the country. That company made part of the lace on the Duchess of Cambridge’s wedding dress, and we were honoured and delighted to participate in that great day.
	I agree with the hon. Member for Derby North (Chris Williamson) that a debate about this topic could not really pass without local MPs mentioning Bombardier. Supply-chain firms in Erewash will be particularly affected by the decision, but we are all agreed in the House, and I am pleased that the Government take the view, that we must review the procurement rules that the previous Government put in place and ensure that we make the best for this country of the procurement process.
	I think that I am the first woman MP to participate substantially in the debate, so I should not let this opportunity pass without mentioning women and encouraging them to go into manufacturing and engineering. I have been working with a school in Erewash, and we are looking to set up a scheme. We are going to have an open day, involving as many schools as possible, to show young women and girls currently at school why careers in manufacturing and engineering can be exciting for them—and the wealth of opportunities and interesting careers that they might not have considered.
	I was delighted by the Government’s recent announcement of 5,000 new mentors to encourage women entrepreneurs. The scheme should include manufacturing as well, and I look forward to seeing how it develops.
	In conclusion, I particularly welcome one other Government proposal: the “Make it in Great Britain” exhibition, which will take place at the Science Museum next year. We need to do all that we can to showcase what we make in Britain and see what we do best. I will be doing all that I can to take schoolchildren from my constituency to visit that exhibition.
	We are united in the House about improving manufacturing. The Government have made a good start, but there is much to do. We must celebrate what we do best, talk up the whole of manufacturing in this country and build on those successes to create strong foundations for the future.

David Willetts: It gives me great pleasure to respond to the debate. I congratulate the hon. Members who tabled and secured the debate: my hon. Friend the Member for Hexham (Guy Opperman) who began with an excellent speech, my hon. Friend the Member for Warwick and Leamington (Chris White) and the hon. Members for Huddersfield (Mr Sheerman) and for Burnley (Gordon Birtwistle).
	This is a very important debate, and I welcome the fact there has been very little partisanship. There have been a lot of shared themes, which I hope to touch on in my remarks. Perhaps the main difference is almost a temperamental one, between the people who take a more optimistic view and those who take a more pessimistic view. I am certainly with the optimists. We can be proud of the revival in our manufacturing sector that is already under way.
	Instead of drawing attention to the overall statistics, perhaps I can reflect on the announcements that we have had this week, which tell us what is going on. Today, the Prime Minister has been able to welcome Toyota’s plans to build its new generation family-sized hatchback at its UK factory in Burnaston near Derby during his visit there. That investment of £100 million will secure many jobs. In addition, Airbus has today announced 200 extra engineering jobs at Feltham, and Nestlé has announced a £110 million investment at its Tutbury plant, which will involve 300 extra jobs. Those are today’s announcements. Yesterday, Coca-Cola announced a £50 million investment in a new bottling facility at Wakefield and other investments as well.
	If one considers the build-up of announcements, there is clearly the sense that a revival is under way in our manufacturing industry. It has been very encouraging to hear from hon. Members on both sides of the House about the strong support that there is for manufacturing. There is a recognition that the future of our economy must include manufacturing, just as our proud history has manufacturing at its heart.
	My hon. Friend the Member for Hexham made an excellent opening speech, and I shall briefly respond to two themes that he touched on, particularly as they were picked up by other hon. Members. He called for there to be a Minister for manufacturing. Let me make the role of the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), clear. Incidentally, he is not here to respond to the debate because Ministers are fanning out across the country today as a result of
	all the excellent news on manufacturing. The Prime Minister is in one part of the country, my hon. Friend the Member for Hertford and Stortford is elsewhere and, of course, the Secretary of State is somewhere else.
	My hon. Friend the Member for Hertford and Stortford, who deals with business and enterprise, has the following responsibilities: aerospace, the defence sectors, the automotive sector, professional and business services and the delivery of the advanced manufacturing growth review. In addition, he is the architect of our next manufacturing summit in Bristol, and he has overall responsibility for manufacturing and materials. Although he does not have the word “manufacturing” in his ministerial title, he is for all practical purposes our Minister for manufacturing. Several Members have asked: who is the go-to Minister? He is the go-to Minister for manufacturing and he does an excellent job. Of course, the Secretary of State also has a clear personal commitment to manufacturing. My view, therefore, is that there is a key Minister in the Government with that responsibility and a Secretary of State with very strong personal commitment to the subject. We are all, as Ministers in BIS, working on this and trying to contribute in our different ways and with our different responsibilities, whether they be for universities, research, science, high tech, skills or apprenticeships.
	A second question put by my hon. Friend the Member for Hexham concerned access to bank finance. That subject is raised regularly in the House, as I often notice in BIS questions. His particular point, which has been pursued by several Members on both sides of the House, is about whether we can do more to enable new banks, especially new small banks, to set up. One of the key recommendations in the report by the Independent Commission on Banking was that we should look at barriers to entry, which are too high. It should be easier for new entrants to come in and set up banks, and we are now pursuing that recommendation. There has already been a round table meeting with challenger banks—the banks that want to come in and do more. The Chancellor himself touched on the subject in a major speech on the subject on 3 October.
	Given my responsibilities for research, high tech and science, I have been frustrated by the time it has taken to establish Silicon Valley bank, which originates, as its name implies, in silicon valley and is a specialist in venture debt that lends to start-up businesses at early stages. I was told that it took it a year just to assemble the paperwork that was necessary for the Financial Services Authority approvals process, and another year for the FSA to consider that paperwork. We in BIS, and the Government as a whole, with the Treasury in the lead, are absolutely persuaded by the argument that we need to think about whether we have ended up with a system that has barriers to entry that are too high. That is why we are looking to see how we can pursue the recommendations of the Independent Commission on Banking.

Guy Opperman: Would the Minister be interested in facilitating a meeting with the FSA and the Treasury? While I have no doubt that BIS may be fascinated by the idea of local banks and better business banking, the Treasury and the FSA seem a little more reluctant to oil the wheels, if that is the right term.

David Willetts: Perhaps such a meeting could be arranged through BIS or the Treasury. Lowering barriers to entry is one way of ensuring that a market is dynamic, that new entrants can come in and that innovation happens, and that is as true in banking as it is in the rest of the economy. My hon. Friend’s suggestion of a meeting is very welcome.
	We heard a range of excellent speeches. I congratulate the hon. Member for Huddersfield on his contribution and welcome his support for Huddersfield university. Although my hon. Friend the Member for Weaver Vale (Graham Evans) is no longer in his seat, I pay tribute to the excellent work that he has done in support of Daresbury, which I have been happy to visit with him. It is a crucial R and D centre for the future where we are committed to strong investment and which has enterprise zone status. We heard from the right hon. Member for Wolverhampton South East (Mr McFadden)—

Barry Sheerman: The Minister said that we have a Minister for manufacturing; we will have to think about that, because some of us were not convinced. Two themes that have come out of the debate—I am sure that the Minister will get round to them—are the need for a long-term strategy for manufacturing and the role of Made by Britain. Does he endorse Made by Britain, and does he think that all Members of Parliament should find a fine design or product in their constituency? We are over halfway there, so will he support our going even further?

David Willetts: The hon. Gentleman says that he is not convinced. I think that if the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford, who has responsibility for business and enterprise, were here, he might have shed a quiet tear at that, because there he is, doing all this work in the Government and being responsible for all these sectors, including manufacturing and delivering the advanced manufacturing growth review. There are arguments about the titles that people should have, but the reality is that he does an enormous amount for manufacturing.
	On strategy, if the hon. Gentleman looks at the growth review that we published with the Budget, he will see that there was a range of specific commitments, ranging from our advanced manufacturing review to commitments across a host of manufacturing sectors. We are doing further work on the future of manufacturing through the foresight exercise that my right hon. Friend the Secretary of State is leading. Manufacturing was a crucial strand of the growth review and there is now a forward-looking exercise in the foresight framework.
	I will briefly take the House through some of the things that we are doing to strengthen manufacturing, which as I said were covered in the Government’s “The Plan for Growth.” Lowering business taxes is fundamental. That is why we are planning to cut corporation tax year on year. Although some people have criticised our decisions on the structure of corporation tax, it is worth remembering that we have legislated to extend the capital allowances and short-life assets scheme for plant and machinery from four years to eight years to improve the tax incentives.
	We are also backing innovation. Several Members from both sides of the House have referred to the importance of the research and development base. I am particularly pleased that we have been able to draw on the lessons from Germany, which has been referred to favourably on both sides of the House, and to learn from its Fraunhofer institutes. Those were a model for the technology innovation centres that we are setting up with £200 million, even in these tough times. We have already identified some of those centres, notably in advanced manufacturing. Indeed, my right hon. Friend the Secretary of State is opening the National Composites Centre in Bristol today. That is the new home of world-class innovation in the design and manufacture of composites. We have also announced that there will be technology innovation centres in cell therapies and offshore renewables, and that there are more to come. We are trying to plug the gap between the pure research in universities and the commercialisation for which individual companies are responsible—the so-called valley of death. The technology innovation centres are one way in which we can plug that gap.
	We are also committed to improving our performance on exporting. That is why we launched the national export challenge, a series of initiatives to help SMEs take the first steps to break into new markets. Currently, only one in five companies in Britain export. We want to increase that to one in four. That means reaching out to mittelstand businesses, or SMEs, that have not thought about exporting. That is why we have set UK Trade & Investment the target of doubling its client base to 50,000 businesses in the next three years.

Therese Coffey: I have heard a lot of compliments about UKTI. However, when I met my local enterprise partnership earlier this week, the concern was expressed that UKTI reacts to requests, perhaps from bigger companies, rather than having a proactive strategy. Do you have any thoughts on how that might change?

David Willetts: In the absence of Madam Deputy Speaker responding to that challenge, I will. The Prime Minister urges all of us in his Government to be as proactive as possible whenever we go abroad, ensuring that we are properly equipped with a sense of the key business opportunities that are relevant to the particular mission that we are on. We have asked UKTI to set out what we call a high-value opportunities programme to identify really big projects around the world where there are opportunities for British companies and suppliers to invest and provide. We are systematically reviewing the high-value opportunities provided by large-scale projects around the world, which we believe British companies can take advantage of by going out and battling for contracts. We are improving the tax system, we are backing R and D and innovation and we are committed to improving our performance on exports.

David Mowat: I have been listening carefully to the Minister’s points about how his Department is helping parts of the manufacturing sector. Many manufacturers tell me that the big issue for them is differential energy prices. Can he assure the House that his Department is on top of that issue, and
	that we will not lose process manufacturing in particular to countries such as France and Germany, and of course to the far east, due to high electricity prices and high energy prices in general?

David Willetts: I can assure my hon. Friend that the Department is very well aware of the particular pressures facing energy-intensive industries, and we are considering them very carefully.

Barry Sheerman: The Minister has mentioned tax twice. When I talk to manufacturers and people in the business sector, they ask why the Government want a blanket cut in corporation tax rather than something that would actually give a tax break to innovators and entrepreneurs.

David Willetts: We are also providing specific support for innovators and entrepreneurs, for example by increasing the value of the R and D tax credits. We are doing specific things, but the coalition’s overall philosophy is that if possible, we like to bring down the basic rates of tax in a simpler tax system. I think that is an admirable objective.
	I do not want to take up too much time, because I know that other Members still wish to speak, but I will briefly go through some of the other things that we are doing, in addition to the lengthy list that I have given—I will not repeat it, but I am sure hon. Members agree that it is very impressive.
	Several hon. Members have mentioned apprenticeships, and we can be very proud of the rate of growth in their number that we have delivered. We now estimate that the really extraordinary figure of 440,000 apprenticeships have started in 2011. I pay tribute to my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, who we all know has an intense personal commitment to apprenticeships. We are absolutely committed to their being of high value. Level 3 equivalent is a minimum, and in July the Prime Minister announced a £25 million fund to support up to 10,000 advanced and higher-level apprenticeships in companies, particularly SMEs.
	Of course, we announced only last week a package to encourage small firms to take on their first apprentice, with an incentive payment of £1,500 for up to 20,000 apprentices aged 16 to 24. There are still too many regulatory burdens and too many problems of red tape, and we have made it clear that companies do not need to add extra health and safety burdens to the basic framework that all employees should have. We are committed to reducing bureaucracy, speeding up processes and boosting employer engagement in apprenticeships.
	We are also committed to supporting and improving the image of manufacturing and engineering, which several Members have mentioned. There is much mythology about manufacturing and engineering. I am sure that Members of all parties find when they go around manufacturing facilities that they are very different from the oily rag image of manufacturing that too many people still have. They are sophisticated places in which highly skilled workers work with large amounts of sophisticated equipment. That is why, with my responsibilities as Minister for Universities and Science, I am very pleased with the increase in the number of science, technology, engineering and mathematics graduates.
	Another announcement just in the past week is that the university of Lancaster is reopening its chemistry department, which was closed in 1999, because of the increase in the number of students coming forward with A-levels in the relevant subjects and because the university believes that in our new regime, it will be able to attract more students as it breaks free from the quota controls of the past. We have secured further investment in skills that are related to the improvement in the image of science and engineering.
	As has been mentioned, there is also the new Queen Elizabeth prize for engineering, launched by the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition earlier this month. We thank the range of private sector partners who have contributed to the endowment of the prize fund. There will now be a £1 million prize, awarded biennially by the Royal Academy of Engineering.

Barry Sheerman: The Minister mentioned £1 million and we have 1 million young unemployed people. Will he join my right hon. Friend the Member for South Shields (David Miliband) in his call for every young unemployed person to be given training and a job? Is there not room for such an imaginative proposal, which would boost manufacturing and everything else in our country?

David Willetts: With both the Work programme and the increase in the number of apprenticeships, we are discharging our obligation to young people. Of course, more can always be done and we are absolutely committed to doing everything necessary to help young people into jobs.
	Let me conclude by assuring the House that the Government are committed to encouraging and supporting British manufacturers. We are determined to create the environment in which they are free to thrive and compete in a global marketplace. The points that have been made by hon. Members, and particularly by those who called the debate, are well made. The Government absolutely understand the importance of skills, innovation and R and D, and the importance of ensuring that the barriers to bank lending are torn down. All that added up makes it clear that we have a strategy for manufacturing, which will be at the heart of our agenda for rebalancing the economy. I very much congratulate hon. Members on their interventions, which I welcome.

Iain Wright: I agree with the Minister that this has been a good and important debate. Manufacturing is not discussed in the House as much as it should be, which is perhaps a reflection of the perception of manufacturing more widely in the country. People could be forgiven for believing that Britain used to make things but does not any more. I therefore congratulate the hon. Members for Hexham (Guy Opperman), for Warwick and Leamington (Chris White) and for Burnley (Gordon Birtwistle), and my hon. Friend the Member for Huddersfield (Mr Sheerman), on securing this interesting and vital debate.
	I agree with the Minister that the debate has been relatively consensual—the House should not worry; I will break that. The debate has been split not by party, but between optimists and pessimists. I am a bit of
	both. I am proud of the fact that our nation engineered the first industrial revolution. We became the workshop of the world. By the eve of the first world war, we produced one quarter of the world’s total manufacturing output.
	To go back to my earlier comments, there seems to a consensus out there, put forward by the media, that this country has somehow lost its grip on manufacturing and closed its factories one by one or sent them over to China. Today’s debate has made a good start in dismissing such myths, because we still make things. Indeed, as the Minister rightly points out, there is much to be optimistic about. Output from British manufacturing reached an all-time high, even adjusting for inflation, not in 1867 or 1907, but in 2007. In the decade 1997 to 2007, UK manufacturing achieved a 50% increase in labour productivity, which is the best rate of progress we have seen in our country’s history. Despite that perception out there, we remain the world’s seventh largest manufacturing nation. Our manufacturing is based predominantly on high value-added activity, including the production and manufacture of toilet rolls—in that high value-added activity, we are world leaders.
	In high-technology manufacturing, the UK is second only to the US in the developed world. In some industrial sectors, our companies are some of the best anywhere on the planet, including in aerospace, which several hon. Members mentioned, and in automotives, oil and gas, chemicals, pharmaceuticals and bioscience.
	As the hon. Member for Hexham will know, the north-east region has a world-class, efficient plant in Nissan, with all the supply chain opportunities that that provides. As the Minister rightly pointed out, today’s announcement that Toyota will build its new car plant in Burnaston is particularly pleasing, especially after the disappointments in that city for Bombardier, on which my hon. Friend the Member for Derby North (Chris Williamson) has been an absolute champion.
	We in the north-east have always valued manufacturing. My constituency of Hartlepool has been particularly strong from the start of the industrial revolution in the 1840s and 1850s right through to the post-war era. We have huge potential now in some world-class sectors such as offshore wind, nuclear and biotechnology, but we need to grasp the opportunities. Global trends mean that British manufacturing should have considerable opportunity in the next few years. Rising incomes for households in many developing economies will create billions of extra customers to whom British firms can sell their goods—a point that was made by my hon. Friend. The need to manage global resources more efficiently and the move to a low-carbon economy will provide new markets for new and innovative products designed by ambitious firms in environments conducive to stable and certain R and D and capital investment. New technologies such as life sciences will revolutionise health care and the way in which drugs are developed, patented and brought to market. Despite the difficulties and issues that I have with the Minister about the science budget, I know that he is a champion of science, and Britain, with its strong science base, should be a leading global player in such fields.
	Today’s debate has allowed the argument to be somewhat more sophisticated than is normally the case. We often see the argument in very blunt terms—we used to do manufacturing, but now we only do services, and we
	need to go back to making things. As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said, there has been a tendency in the structure of such debates to look in the rear-view mirror. In the past 60 years, this country has often chosen the stark model of economic sectors, selecting a service-based economy over manufacturing. That has meant that, despite our remaining a strong manufacturing nation, the sector constitutes only 11% of our economy, compared with 20% for Germany. As my hon. Friend the Member for Huddersfield said correctly, we have lurched too far away from manufacturing over the last 30 to 40 years. Manufacturing should constitute a much bigger share of our economy, but it should not be an either/or situation; nor should it be at the expense of our service sector. There should not be an artificial distinction, because service’s growth boosts manufacturing, and vice versa.
	I can think of no finer example than Rolls-Royce, whose Derby plant I visited last month, as did the hon. Member for Erewash (Jessica Lee). The company is synonymous with British excellence—indeed global excellence—in engineering and manufacturing, but as we found out on our visit, it now derives half of its revenues from services, in providing long-term customer service contracts. The long-term revenues to be derived from such services are reinvested into manufacturing capability.

Barry Sheerman: I just want to correct a possible misapprehension. The members of the all-party manufacturing group are not rear-view mirror people: we actually believe that our manufacturing sector is superb in many aspects. It is just that we want to grow it and invest in it, as well as to encourage more entrepreneurs to lead it. That is the purpose of this debate. We are not negative: we are positive, and I congratulate my hon. Friend on choosing a product made by Britain, and I hope that every hon. Member will join the Made by Britain campaign.

Iain Wright: I absolutely agree, and my hon. Friend and I share the view of my right hon. Friend the Member for Wolverhampton South East that we should be bold and ambitious about manufacturing. We do not hark back to the past, but we want to engender that spirit of enterprise, innovation and ambition to ensure that we are the best engineering nation anywhere on the planet, that people can go into a career in manufacturing engineering secure in the knowledge that it is rewarding and produces products that we can sell to the rest of the world, and that Britain leads the world in that area.

Guy Opperman: May I take the shadow Minister back to the future? Does he agree that the idea of local banks, as outlined by several hon. Members, and an industry bank such as KfW, should be supported by Opposition Members?

Iain Wright: I listened closely to what the hon. Gentleman said in his excellent contribution, and in a moment I will mention the problems that companies—especially manufacturing companies—have in accessing funds that would allow them to grow, especially in export markets.
	I have a particular suggestion to put to the Minister on whether the Government are trying to do anything about that.
	I hope that I have mentioned the huge potential and the enormous scope for us to be a leading player in manufacturing and engineering in the 21st century. None of that is inevitable, of course, and nor will it happen by chance. In the era of the most intense global competition imaginable and with economies such as China—known for its low-cost manufacturing—anxious to move up the value-added chain, Britain needs to put in place the best possible policy framework to ensure that our ambitions are realised. In the words of Richard Lambert, the former director-general of the CBI, the Government, particularly the Department designed to champion British growth, enterprise and industry, need to provide
	“a vision of the kind of economy we want to have in ten years time and what it’s going to take to get from here to there”.
	Instead, however, a leading global manufacturer has stated flatly:
	“The government is not giving us a reason why we should be in the UK in 10 to 15 years’ time.”
	The Government are not doing all that they can to allow British manufacturing to fulfil its potential. Worse than that, decisions taken by Ministers in the Department for Business, Innovation and Skills in the past 18 months have ensured that British manufacturing has taken a backward step. Our economy has grown by just 0.5% in the past year compared with 1.5% in the US and 2.3% in Germany. Export activity is stalling, and both output and sentiment are at their lowest levels since the height of the recession two years ago.
	That situation is confirmed by today’s publication of the CBI’s industrial trend survey, the briefing on which reported:
	“UK manufacturers reported a weakening in order books in November, with export orders in particular deteriorating significantly… As a result, firms expect a fall in production over the coming quarter”.
	Not all of this is the Government’s fault, but an awful lot of it is—far more than BIS Ministers will acknowledge. BIS, charged with being the Department for growth, is weak and out on a limb in Whitehall. Whether trying to secure a stimulus for the economy—we will see what happens on Tuesday with the autumn statement—or support for the UK train manufacturing industry, the solar panel industry, Sheffield Forgemasters or long-term investment in oil and gas, the Secretary of State always plays the game but always loses. Worse than that, though, he always loses by putting the ball in his own net. The CBI’s director-general, John Cridland, described the appalling decision, which the House debated yesterday, on feed-in tariffs and the threat to the solar panel industry as
	“the latest in a string of government own goals”.

Richard Harrington: I agreed with much of what the hon. Gentleman said until he claimed that the Government should take much of the blame over the past few months. I must return his mind to the fact that more than 1 million manufacturing jobs were lost under the tutelage of the previous Government. I would like to hear his comments on that.

Iain Wright: I do not know whether the hon. Gentleman has been following my comments but, over a 40 or 50-year period, we have lurched too far away from manufacturing to the service sector. In the past 10 or 15 years, though, productivity in manufacturing has risen faster than ever in this country. My right hon. Friend the Member for Wolverhampton South East touched on these matters. Given the rise of China and other players, globalisation and the fact that we were the first country to industrialise, it was almost inevitable that there would be a relative decline. However, our manufacturing industry has declined too far, too fast, and we need to do something about that on a cross-party basis. Nevertheless, there has been great cause for optimism over the past 10 to 15 years.

Barry Sheerman: This has been a refreshingly all-party discussion but I want to come back to feed-in tariffs. The industry in green technology and green innovation is growing dynamically and people in my constituency in the business know that the feed-in tariff had to be modified, but for God’s sake why not give them six months to adjust, rather than allowing companies to go out of business and lose all that growth?

Iain Wright: My hon. Friend is correct, and to conclude this part of my speech, I shall quote the director-general of the CBI with specific regard to that decision on feed-in tariffs, which was taken without notice to the industry. In keeping with our football metaphor, the director-general said:
	“Moving the goalposts doesn’t just destroy projects. It creates a mood of uncertainty that puts off investors. They wonder what’s coming next…Industry trust and confidence in the government has evaporated. This bodes poorly for investment in future initiatives…A new industrial policy needs to recognise the real-term costs of bad decisions and should set out a clear path that investors understand and can believe in.”
	We certainly agree with that, as the country has not got the clear strategic direction we need from this Department. We sometimes get warm words; we often get welcome, albeit ad hoc, announcements. Industry, however, is uncertain of the strategic direction in which the Government and this Parliament want to take the country in manufacturing.

Mark Hendrick: Coming back to the point about job losses, many manufacturing jobs were lost under the previous Government over the 13-year period, but some of them have moved, as the Minister said, to the far east and elsewhere. Many of these jobs were not particularly high-skilled, and modern technology and manufacturing has moved on. The problem was that those jobs were not replaced quickly enough by more modern, hi-tech skilled jobs. That is the challenge the Government must face for the future.

Iain Wright: I heartily agree with my hon. Friend. My questions for BIS Ministers relate to having an active industrial policy. Where is the assessment of the sectors in which Britain has unique competitive advantages and of where we can sell our unique products to the rest of the world rather than lamely following the rest of the pack? Where are the clear milestones along the way that would allow investment and business decisions to be taken with some degree of certainty and stability?
	A recurring theme of today’s debate has been the role of research and development and associated capital allowances. Again, I want this country to be the best place for any investor in manufacturing to invest in research and development, but R and D tax credits, the industry tells me, are not working. What can we do on capital allowances and R and D spend? When can we expect some clear vision from the Government about the road map that is needed as part of an effective and active industrial policy? We have had welcome announcements about funding for technology and innovation centres—I think the Minister mentioned them in his remarks—but the ad hoc decision is a diluted version of what was set up and planned under the previous Labour Government, with businesses now unclear about how they fit into the bigger picture. The Department promised us its manufacturing framework document over a year ago, but it has still not been published. Where is it?
	Another common theme has been the concern—expressed by the hon. Members for Hexham and for Burnley (Gordon Birtwistle)—about the inability of manufacturers to secure access to finance for growth. The Secretary of State’s initiatives have not worked. Project Merlin has not secured its aims and the regional growth fund is not delivering on the ground. In the space of 55 seconds—I timed it—in yesterday’s debate, the Secretary of State went from claiming that as a result of the RGF,
	“factories have been built and the jobs are being created”—[Official Report, 23 November 2011; Vol. 536, c. 333.]
	to acknowledging, in response to the Chair of the Select Committee on Business, Innovation and Skills, that he could not provide a figure on the number of jobs created by that fund at all. Will the Government look again at this crucial issue of access to funding?
	Many companies are sitting on a pile of cash on their balance sheets, largely because they have little confidence in economic prospects, but is anything being done by this Minister and the Department to free up some of that cash to provide much needed finance to manufacturers? I hope that the Minister will intervene to provide a degree of clarity on that; otherwise, I am happy to wait for the Chancellor’s autumn statement on Tuesday.
	Several hon. Members mentioned the huge opportunity for export markets. We have been behind the curve in emerging markets for some time. The CBI and Ernst and Young have just published a report, which demonstrated that UK businesses tend to rely on the US and continental Europe for their main export markets. The report quotes the chairman of a Mexican automotive parts manufacturer, stating:
	“Overall I think the UK and its companies should pick the right battles and the right countries, and focus on specific sectors within those markets. There’s a lot of goodwill out there that’s not been exploited.”
	Will the Minister respond to that and set out what has been done—he touched on it in his opening remarks—to strengthen our export capability? Time and again, firms say that they cannot exploit their potential by gaining access to export finance, that the range of such finance is limited and that things such as the export credit guarantee do not specifically address business needs. How can the Government address that?
	Industry states that the supply chain to UK manufacturing needs to be improved. That is crucial in ensuring that British manufacturing is competitive in
	global markets throughout the world. The Secretary of State acknowledges that. In his speech to the Policy Exchange last month, he talked about how
	“Government can support UK supply chains across a number of sectors critical for future growth.”
	Since then, however, we have had no information or detail, or even an announcement as to when we might be given any. Industry is crying out for that as a means of boosting its competitiveness, so it would be helpful if the Minister could provide further detail.

Adrian Bailey: Will my hon. Friend give way?

Iain Wright: Yes. I would very much like to hear from the Chair of the Business, Innovation and Skills Committee, as he has great expertise in this area.

Adrian Bailey: Given the potential to expand the supply chain in the west midlands through the Jaguar Land Rover development and the possible repatriation of the supply chain for many of the Japanese manufacturers because of the problems in Japan, does my hon. Friend agree that the Government must come up with measures to bridge the capital funding gap, so that small businesses can exploit these opportunities?

Iain Wright: I entirely agree. One of the central themes of my remarks is that we have a huge opportunity, and that in the long term we can thrive as a leading manufacturing nation, but first we must overcome some very serious short-term difficulties involving finance and both domestic and international demand. Despite the warm words and fine rhetoric from the Government, I am not convinced that we are addressing the issues that industry wants us to address.
	Manufacturing can play a leading part in Britain’s 21st-century economy, but in order to succeed in the modern era we need an active industrial strategy of partnership, where the join between industry and Government is not visible. Instead, we have a Department and a Government who lurch from one ad hoc announcement to another, via a series of wrong industrial policies. We need something better and more ambitious, so that we can tap into this country’s enormous potential and ambition in manufacturing, including in innovation. I want Britain to be the best place anywhere in the world in which to carry out manufacturing, but in order to secure that for the long term we need Government to act now.

John Stevenson: I am delighted to have the opportunity to take part in this important debate, and I congratulate the Members on both sides of the House who secured it. The subject is central to the economic well-being of this country. Manufacturing matters both locally and nationally.
	On the local scene first, in my constituency of Carlisle there are five major manufacturing plants, as well as many smaller manufacturing businesses. Those five major plants are big employers; between them they employ between 3,000 and 4,000 staff, producing for national and international markets world-class products, such as Pirelli tyres, Carr’s water biscuits, Quality Street—whose
	tins of sweets we all have at Christmas—and, most important of all, the humble custard cream. Manufacturing also matters nationally, as it is a key part of our past and must be a key part of our future. We have to start making things again.
	It was interesting to hear the shadow Minister, the hon. Member for Hartlepool (Mr Wright), talk about being an optimist and a pessimist, because before this debate, I concluded that our country has reasons to be pessimistic, reasons to be realistic, and, most important, reasons to be optimistic. If we are pessimistic, we can look back and consider that in 1980 manufacturing accounted for 24% of our economy, but the figure now is just 11%. Over the last 14 years we have lost 1.7 million jobs in manufacturing. We now rank between the sixth and the ninth largest manufacturing country, and we are sliding down that list. We rank 18th highest for machine tools investment, which is lower than Mexico. Germany has nine times more investment in plant and machinery than the UK, and many areas of our manufacturing have completely disappeared or have greatly reduced, such as textiles.
	We have to be realistic. This country has less than 1% of the world’s population and we are no longer the engine-room of the world. Other countries will inevitably grow their manufacturing sectors and become larger manufacturing producers than us, and we have to accept that. We also have to accept that low-cost countries are hard to compete with in many ways. Technology and productivity also mean that fewer workers will often be required to produce the same amount of output. Although we must not lose sight of the fact that manufacturing is only part of our economy, it is important. Our trade gap was £100 billion but that reduces to about £37 billion when we take into account the surplus from services.
	We have reasons to be optimistic about the future of manufacturing: Britain remains a major manufacturing country; manufacturing contributes £140 billion a year to our national economy and provides 55% of our exports; we remain a major force in aerospace and pharmaceuticals; and our manufacturing industry is innovative. We often forget about the food and drink industry, but it is our largest manufacturing sector, producing 15% of our output. It also produces 8,000 new products annually and it has survived the recession extremely well. Indeed, by 2017 it will need to recruit about 137,000 people just to replace those retiring.
	We also need to take into account investment. There is investment going on in this country: £500 million from BMW; £192 million from Nissan; and the £55 million that Coca-Cola announced just yesterday. Business does want to invest in manufacturing and it wants to invest in Britain. I am pleased to hear the Minister being positive about manufacturing and demonstrating that the Government are interested in manufacturing and want to be proactive. I congratulate them on the “Make it in Great Britain” campaign, which is to be warmly welcomed.
	We must also remember that the nature of manufacturing is changing. It is becoming more high-tech and more skilled, and that might be favourable to a country such as ours. In the future, there will be growing markets. We have talked about the BRIC countries—Brazil, Russia, India and China—but other countries in Asia give us opportunities for the future. As countries become wealthier, there is a diminishing gap between the emerging and the mature markets. That also gives us an opportunity to be
	more competitive in the global market and to tackle the new markets that are being created. So I believe that there are reasons to be optimistic about the future. To misquote Mark Twain, the reports of the death of manufacturing are greatly exaggerated.
	What can we do and what do we need to do to ensure that British manufacturing has a prosperous future? Clearly there is no panacea, but a combination of issues and ideas can help manufacturing. Undoubtedly, the Government have an important role to play and it is good to be reassured by the Minister that they are aware of the issues in manufacturing and want to support it. I am talking about things such as reducing unnecessary regulation, adopting a sensible tax regime, the Government supporting, talking about and promoting manufacturing, and helping the supply chain and helping with energy costs. The Department for Business, Innovation and Skills is to be congratulated on its support for that.
	We have had real successes. On skills, apprenticeships are being created up and down the country. The number has increased by 300 to 1,000 in my area, and that is to be welcomed. We have also seen the expansion of the university technical colleges and the targeted funding through the regional growth fund—for example, £2 million is going into Pirelli, with its plant in my constituency. Central Government form just one part of government; local government, which is another part, also has a role to play, for example, through the planning system. I welcome the changes in that area, but local government must take those opportunities, and be sensitive to business and help it. Local authorities are often property owners and they also have an opportunity to help business and support its development. Industry must also help itself. It must take responsibility for research and development investment, long-term planning and the training of its staff, and it must help to promote its own image. Engagement by the industry with councils, schools, colleges and universities is equally important.
	I shall conclude by saying three things. First, I fully support and endorse the idea of my hon. Friend the Member for Hexham (Guy Opperman) that there should be a Minister for manufacturing. Such a person would be the champion for manufacturing, working across Departments and ensuring that manufacturing is heard and has a loud voice within government. Secondly, education and skills are vital, and I know that the Government are working hard in that area. I am talking about skills that industry actually needs: the skills that will help us to develop our manufacturing sector for the future. Finally, probably the most important thing we need is a cultural change. We need it in Government at a national and local level, in schools, in the press and in the public’s view of manufacturing. If we have a national cultural change, I believe that manufacturing can have a prosperous future.

Craig Whittaker: As more than 19% of the people who live in the Calder Valley work in manufacturing, it is no wonder that I spend so much of my constituency time visiting fantastic manufacturers and local businesses. If the hon. Member for Huddersfield (Mr Sheerman) classes Huddersfield as the cradle of manufacturing, without question Calder Valley is its family home.
	We have not only many small niche and high-end manufacturers who supply locally and internationally but many world-leading firms that fly the flag for Britain. They include companies such as Heights, which supplies graphic arts equipment to major photographic companies, such as Kodak and Fuji, and Calrec, which supplies high-quality audio consoles to television studios all around the world, even to Japan. Hon. Members will all be pleased to know that the consoles that allow the nation to watch “The X Factor” every week come from Calrec in Hebden Bridge. We also supply 40% of the European market’s caravan industry with caravan looms made in Elland by BCA Leisure. They are Great British companies, flying the Great British flag. The fantastic thing that I am hearing from our local manufacturers is that we really are starting to fly, especially those who manufacture to export.
	The absolute evidence of that is the huge investment we are seeing in new machinery, jobs and factories in the local area. No fewer than four brand-new factories are about to open. Boxford Ltd, which manufactures computer-aided design—or CAD—based lathes for education is about to move into its purpose-built £6 million new factory next week. That was delayed by a month because of a huge order received from Argentina, which was not following the lead of America or Europe in the way that the hon. Member for Hartlepool (Mr Wright) suggested earlier.
	Decorative Panels is in the process of building its £8.5 million factory to incorporate two new factories for production and it will be up and running in April. KT Hydraulics should also be fully operational by February with its £2.5 million factory and Heights, which I mentioned earlier, has just got planning permission to double the size of its current factory up in Wainstalls. That is all evidence that when companies are stable and low geared, they make a difference to our economy.
	There is a but, however. Although the companies are doing well and investing in our future, this really is a tale of two halves. At the business breakfast forums I hold every eight weeks—I have done so for the past three years—there has been a unanimous chorus about the banks. Many Members have mentioned the banks and how they are doing business. The banks would have us believe that they are lending money to businesses and I have no reason to doubt them, but the only problem is the conditions that they are imposing on our businesses, normally at huge cost.
	I recently visited a local manufacturer that is a subsidiary of a larger world player in electronics. It supplies a large proportion of the Korean market and 20% of the Japanese market and recently got a fantastic deal from a bank that perfectly met its business needs. The bank was the Silicon Valley Bank in California. Why? Because in the words of the managing director of that company, it totally understood the business and its business needs.
	I was also asked recently to attend a meeting with another local manufacturer and its bank manager. The company borrowed £100,000 several years ago to buy a building and a further £50,000 more recently to expand the business. Business is up by 20% this year. After sitting through the meeting for two hours listening to the bank manager sing the company’s praises and even saying he wished all his customers were like it, I left for another meeting only to learn later on in the day that the bank manager had said after I had left that the bank
	would like to take a debenture over its fixed and floating assets and have a joint and several guarantees from the directors. It was explained to them that that was all to the benefit of the directors as it would move them down the queue when the bank came asking for its money back. That is the type of thing that I hear week in and week out from my manufacturers.
	Calder Valley manufacturers are among the world’s best. Indeed, in many cases, they are the very best at what they do. They do not want a hand up or handouts—just a plain, old-fashioned level playing field. They tell me week in and week out that they will do their best to get on and play their part. We need the Government to put pressure on our banks to look at their practices and to get to know intimately what their local customers do. For far too long, business account managers in banks liaise with customers but then decisions about financial transactions are made by faceless people who are often miles away and have no idea or clue about what the businesses that are asking for the loans do. That needs to change. If it does not, the manufacturers that are still in business will turn more and more to banks such as the Silicon Valley bank, which, in the words of a Calder Valley managing director,
	“totally understood our business and our business needs.”
	The current situation cannot be good for manufacturers, business or the country as a whole.
	We accept the need to charge full business rates on empty buildings. That was mentioned earlier and would have been my third example had I more time. Some businesses might need to benefit from an extension or a deferment plan; otherwise some of the businesses that are really struggling are going to fold. It is clear that our manufacturers in Calder Valley are a beacon for our economy. Let us make sure that we can facilitate greater growth by listening to our manufacturers, by putting pressure on the banks and by helping manufacturers when they need support.

Mike Weatherley: I shall be brief and hope not to take up the full eight minutes I have been allotted. I want to concentrate on smaller manufacturers. My hon. Friend the Member for Warwick and Leamington (Chris White) might be interested to know that I come to the debate with a certain amount of expertise. First, I am a chartered management accountant and that profession is geared towards manufacturing. In addition, I was previously the owner and finance director of a manufacturing company in East Sussex. While I was there, we won a Queen’s Award for Export, a Queen’s Award for Enterprise, and Sussex company of the year. The company exported to 48 countries worldwide and had five satellite offices overseas. I pay tribute to my previous business partners Hugh Burnett and David Westcott and to all the staff at Cash Bases.
	The two areas I would like to highlight today are staffing and finance. When I owned that company in the late ’90s we had enormous trouble recruiting staff at all levels. We even laid on buses from outlying areas. That was in the boom years after the Conservatives had put the economy on a good financial basis but the shortage of both skilled and unskilled workers was exceptionally
	high. The fact that our education system was, and almost certainly still is, geared towards service sector jobs rather than traditional engineering and machine operation is to our detriment. I recognise many of the points that the hon. Member for Huddersfield (Mr Sheerman) made about education, so I shall not revisit them. I appreciate the apprenticeships that the Minister mentioned earlier, but we need more of those to cover the skills gaps.
	A far more worrying issue, which is a huge hindrance to growth generally but manufacturing in particular, is the availability of funds, which my hon. Friend the Member for Calder Valley (Craig Whittaker) mentioned. The banks can give very small loans but when the requirement creeps over the £10,000 mark, it gets very difficult. The enterprise finance guarantee scheme is supposed to fill the gap between equity investment and the lower levels at which banks are lending, but it fails on two counts. First, the banks do not like it and will not lend with the 25% risk factor. Secondly, the amounts being loaned are just too small.
	There are 4.8 million SMEs in this country, but the Government are currently targeting loans at only 6,000 for this year. In comparison with previous years, the amount of funding has decreased. There was £1.3 billion in 2009-10 and £700 million in 2010-11, and the figure has gone down to £600 million for 2011-12. They are not just grants; they are loans that the Government get back.
	I recognise what the right hon. Member for Wolverhampton South East (Mr McFadden) was saying about the creative industries. To my knowledge, not a single small firms loan guarantee has been given to the music industry, and that is a great shame. In the first half of 2011, just 1,779 firms were successful in obtaining such loan guarantees, and the average amount is just under £100,000 per loan.
	My second point is the funding gap. Anything under £5 million is difficult to finance. When I purchased the company in Newhaven, East Sussex in 1997, we bought it for £4.2 million. The venture capital company that backed us then has said that it would not back a similarly low investment again. Anything under £5 million is considered totally uneconomic. That and the funding for small businesses trying to grow our industries need to be addressed.
	Exports are another financing-related issue. I was pleased to hear what the Minister said about the Government’s growth targets. I will certainly hold the Government to account to try to reach the levels that we would like to achieve. However, funding for exports is not balanced sufficiently when compared with inward investment. Of course, inward investment is good for a short-term fix for jobs, but we must substantially address the fact that exporting is an important part of any recovery in the long term.
	In summary, the enterprise loan guarantee scheme must be improved. The 25% collateral that the banks require puts them off making proposals. Indeed, the amount available under such schemes must be increased to get closer to where equity investment becomes sufficiently realistic. Lastly, let us not forget the staffing implications. We must gear towards manufacturing, not just the service sectors.

David Ward: We have heard advice to not go back in time, but I should like to go back 170 years to 1840, when two thirds of the country’s wool products were made in Bradford. In fact, by 1850 it was the world capital for wool. In 1876, when Sir Titus Salt died, 100,000 people lined the streets during his funeral to commemorate his work. Now, of course, Saltaire village is a world heritage site, but the huge mill closed down in 1986.
	Some hon. Members might be aware of the Jowett motor car, which was produced in Idle in Bradford. Idle is where I live. I was in fact, yes, the Idle councillor for 26 years. Jowett closed and was taken over by International Harvester, which closed in 1983. I get quite cross when I hear people who are old enough to remember the ’80s recession compare this one to that one. There is no comparison. When International Harvester shut, the council estate in the ward that I represented had 70% male unemployment and men who did not work again and had children who did not work. That was the scale of things in those days.
	I shall explain the relevance of those two examples. Salt’s mill was brought back to life by the brilliant work of remarkable Jonathan Silver. It is now the home of the Saltaire art gallery, where David Hockney has an exhibition. More pertinent to the debate is the fact that it is the home of Pace plc, which is the largest Yorkshire technology company and has more than 500 staff there. The International Harvester site became a large Morrisons complex, with a shop for itself and a large retail outlet. Particularly important to this debate is the fact—not many people understand this—that Morrisons is a large food manufacturer. In fact, it provides 5,000 food manufacturing jobs. Those are examples of two important sites that were part of Bradford’s previous manufacturing glory and have had a second life.
	I ought to compliment both Morrisons and Pace on the fact that, like Titus Salt, they are reinvesting in the community. Top graduates from Pace visit schools in our deprived communities as part of the Teach First programme to put something back into the community. Morrisons offers a university degree in food manufacturing, and is providing work for 1,000 homeless people across the country. The textile industry still exists in Bradford. We have Haworth Scouring, which is the largest wool-processing business of its kind in the world, and some 70% of its produce goes to China for carpets.
	I praise Labour as much as I possibly can whenever it is warranted, to try to ensure that I have some credibility when I point out the things that it did wrong. In Bradford, between 1998 and 2008, we lost 15,000 manufacturing jobs—or 40%. That was at a time when there were 40 successive quarters of growth in the economy. I say that not just to have a go at Labour, but to point out why this debate is crucial. I do not for a second believe that that was the deliberate intention of the Labour Government; it happened in error as a result of neglect. We need to understand why this debate is so important; it is so that we have a focus on the future, as was said earlier, and the future must include manufacturing.
	Bradford is not just about manufacturing. It has a financial services sector, and that, thank goodness, kept us going through some of the dark days. There is
	Yorkshire building society and Provident, which was formed in 1880 in Bradford. Provident’s representatives were here yesterday, along with representatives from Westfield and Morrisons, to sell Bradford to the City.
	We are UNESCO’s first city of film; we have a tourism offer; and we have wonderful theatres, universities and colleges. We are not just about manufacturing, but the future of Bradford must lie in a successful, thriving manufacturing sector. We have the largest single-site chemical plant in the UK, but most of the manufacturing businesses—71%, or 1,300 of them—have fewer than 10 employees. The newly created Bradford and Airedale Manufacturing Alliance is contributing to the regeneration of the manufacturing industry through networking, providing new business opportunities, looking at co-operative working, and the spreading of best practice, advice and guidance. There is very much a renaissance taking place.
	To conclude, as a Bradford MP I have a duty to speak out and remind Members of the history of places such as Bradford. Without manufacturing, there would have been no Bradford as we know it, and manufacturing must be an integral part of the future. The message to the Minister is please not to let places such as Bradford down. Bradford is ready to rise to the challenge, and to make its contribution to rebalancing the economy. It is a new dawn in Bradford, but in that new dawn manufacturing must be centre stage. I understand that manufacturing is 3% of the economy in London; it is 13% in Bradford. A total commitment to manufacturing is therefore not only part of the very welcome rebalancing from the service sector to manufacturing, but a crucial part of rebalancing from the south and the south-east to the regions. That is long overdue, and those of us with an interest in manufacturing, and all of us with an interest in the north, are impatient for that.

David Morris: I am delighted to be called to speak in the debate, not only to highlight the needs of my constituents and the manufacturing industry, but to support my room-mate and hon. Friend—he is not right hon. yet, but headed that way—the Member for Hexham (Guy Opperman). I like to think that I have taught him everything he knows.
	My constituency is heavily reliant on energy production and manufacturing. Like many north Lancashire constituencies, we make high-spec components for clients in the energy, defence and constructions industries. When we watch programmes on television about the amazing engineering feats involved in BAE Systems, in nuclear submarines at Barrow-in-Furness and in the nuclear power station at Heysham, in all likelihood the vital components we see will have been made or designed in my constituency. North Lancashire has a skills base that allows it to compete favourably with areas that have low labour costs. Manufacturers in China and India, for example, are unable to offer their products with a 10-year guarantee because they are often not of the same quality. The situation is similar to that of BMW in Germany: it has never produced the cheapest cars but is popular because of its build quality and reliability. Our manufacturing sector is struggling not as a result of a lack of orders, but because of the perennial problem of recent years: lack of money.
	Any manufacturer of high-quality components needs to invest large sums in three keys areas: machinery, IT packages and training. It is worth going through each in turn. On machinery, I was talking recently to a manufacturer in my constituency who used to import 5,000 plumbing hoses a year. The products were no cheaper to order from China than they were in UK, but placing an order gave 30 days’ credit and the outlay is lower than buying a machine. It took the company several years to save enough money to buy the machine needed to make the hoses, but once it did it began making 7,000 a year. Obviously, British workers were employed to operate the machine, cutting unemployment in the constituency. Whatever we do in this difficult economic period, we must find a way of ensuring that businesses are able to access money and buy vital machinery.
	On IT packages, the modern computer developed from an idea that came out of Bletchley Park during the second world war. We have always been world leaders in IT, but as computer packages have become more sophisticated the costs have risen. Although the packages save staff time and improve productivity, they also require capital outlay. I have heard plenty of examples of manufacturers being unable to turn ideas into viable products because the IT package required is just too expensive. I am not complaining about IT costs per se, as the people who design the products deserve to be properly paid. My complaint is once again that banks and the old regional development agencies were so poor at supporting businesses with the capital they needed to buy the products in the first place.
	On training, I suppose a purist accountant would not view training as capital expenditure, but manufacturers are often required to pay for expensive training before a product is ever made. In practical terms, that means that lack of credit and poorly administered grants have an impact. Training for some IT packages can cost £1,500 per member of staff. When a company needs large numbers of staff to be trained, it is easy to see how costs soon mount up.
	I have laid out three problems, but what are the solutions? First, we must accept that for small and medium-sized enterprises the regional development agencies simply did not work. They were too unresponsive and too focused on larger businesses. Many companies that I have spoken with got the impression, rightly or wrongly, that RDAs would step in only if a product would fail without them. That makes sense on paper, but in reality it is not about a product falling; it is about how quickly it can be brought to market and where it is made. Grants were not always available for speculative investments such as the machinery, IT packages and training I have mentioned. Things need to change and enterprise zones are a step in the right direction.
	I know everyone will agree that we also need to get credit moving. I have now accepted that the big six banks cannot or will not help. We need greater diversity in our banking sector, so that the big banks are forced to serve business better. We need a regulatory environment that encourages more banks to enter the UK market and encourages more British companies to establish banks.
	“Made in Britain” is still a mark of quality throughout the world, and our products still command a premium that makes our manufacturing viable. From the new
	plumbing system at Sidra hospital in Qatar to the A380 super-jumbo jet, British manufacturing is a vibrant part of our economy. Contrary to popular myth, we are still the world’s seventh largest manufacturer, but without solutions to the capital outlay problem we will never reach our full potential. We must give our companies the money that they need, because it is vital to invest in the future and in manufacturing. They maintain our skills base and are vital to the diversity of the British economy.
	We should take this debate forward and act upon it. I thank again everyone for taking part in it, and my hon. Friend the Member for Hexham for bringing it forward in the first place.

Richard Harrington: I, too, congratulate my hon. Friend the Member for Hexham (Guy Opperman) on bringing about this debate. I also congratulate the Minister on his comments so far and, in particular, the shadow Minister, the hon. Member for Hartlepool (Mr Wright), not only on his contribution, but on the resilience of his bladder, which has enabled him to stay in his place for such a long time. It is always a pleasure to see him. On these occasions, it is difficult to think of something to say that is different from the contributions that other Members have been making for what seems like 25 hours. But I shall do my best.
	I was born into a family with a modest factory, and I saw the decline of British manufacturing through my own experiences and my own eyes, because my father was similar to most small manufacturers of clothing in Leeds, near to the constituency of the hon. Member for Bradford East (Mr Ward), and he had a similar business to those in Bradford. He was put out of business by imports, but we have to look beyond that and ask, “Why has manufacturing failed?” [ Interruption. ] The shadow Minister shakes his head, but it has failed, and I will explain why.
	Manufacturing has failed as a type of business for entrepreneurs to go into as a start-up. We all know that in Britain most large businesses started off not with big foreign investment, which has been very successful, but with people deciding to start businesses in a small way and to build them up to medium-sized businesses and then into some of the great businesses, such as those that the hon. Gentleman mentioned in Hartlepool.
	Manufacturing has failed for three reasons. First, there has been a failure of capitalism in this particular field. Members might think it strange to hear a Conservative Member using Marxist terminology—[ Laughter ] —particularly for the amusement of the hon. Member for Huddersfield (Mr Sheerman)—but I mean that although a lot of capital has been employed in businesses in this country, comparatively little has been used by manufacturing. That is because capital is invested to obtain a return, and in my generation manufacturing enterprise has not generally led to significant returns.
	Capital that belonged to families has grown in other ways. My father is a classic example of a person who, having found that his business was worthless, sold a small site to property developers and probably made more money than he could have in years of business. That is the story of many family manufacturing businesses in this country.
	Secondly, there has been a failure of management. The hon. Member for Huddersfield, in an excellent contribution, mentioned being shown around Magdalen college, Oxford, where he was told that the bright undergraduates were going into the City. When he made that point, he was looking at my right hon. Friend the Minister, who I remember from my time was in fact at Christ Church rather than Magdalen, but I am sure he accepts that in our generation exactly the same thing happened.
	Why did people go into the City? First, those people who were business-minded went, perfectly reasonably, into businesses where they felt they could make a lot of money. Secondly, and to draw another a Marxist analogy, for more than 100 years the class system in Britain looked down on manufacturing industry, so all that people such as my father, who was in manufacturing, wanted was for their sons not to have to put up with what they had put up with. These days people would say that manufacturing is not “cool” or “culturally acceptable”, but for many years has fallen, let us say, out of fashion.

Craig Whittaker: I have a lot of empathy for what my hon. Friend is saying. I mentioned in my speech the companies Boxford, Heights, BCA Leisure and Decorative Panels, all from the Calder Valley. They started from very small premises indeed and have built up. Does he agree that the biggest problem at the moment is that the banks just are not investing in research and development?

Richard Harrington: I very much agree with my hon. Friend’s intervention, but that issue has been covered in other hon. Members’ speeches, and in the remaining time I am trying not to mention it for that reason—valid though it is.
	The reality is that for bright young people, manufacturing is not, by and large, something for them to go into. For some reason it is different in the United States. Very bright graduates—the brightest that Harvard and other places have—could always join firms such as Ford, General Motors and IBM. At those companies, they could expect to make as much money—if it is, indeed, money they are interested in—as the people who joined Goldman Sachs or such firms in Wall street or the City. We have not had that here so, in my experience—and that of the hon. Member for Huddersfield at Magdalen college and of the Minister at Christ Church college—people who were interested in making a lot of money from our generation did not go into manufacturing.
	I have mentioned capital and management. The third issue is labour. I am not falling into the ridiculous trap of saying, “It’s the fault of the unions and the workers that we don’t have manufacturing.” Nevertheless, the issue of labour is a contributory factor. In Watford, where we have a few very good manufacturing companies, notwithstanding that there are 3,000 people on jobseeker’s allowance in the constituency, manufacturers have a problem getting unskilled labour because they cannot get people who will do night shifts and consistently do the kind of work that is expected. It is not dangerous work, but it is fairly mundane. Consequently, they have to import labour from Poland.
	It is not right in the remaining nanosecond I have left to go into detail about the benefit culture, but we have to accept that if manufacturing is going to return, we
	must have people who believe it is a perfectly respectable and proper occupation to work in a factory. We want them to, and they should be properly rewarded for doing so. However, we cannot have a situation in which people feel it is not the right thing to do.
	Manufacturing has been the victim of imperfections in capital and in management, its status in society and the attitude of labour towards it. Such a situation needs to be corrected, but that should be done on the true basis of entrepreneurship, which relates to people who may be called greedy by some. They want to make money, but they will pay their taxes and employ people as a by-product. It is a great thing to employ people but, for somebody going into business, it is a by-product rather than the reason they are doing it. When manufacturing becomes easier than property development, easier than the City, easier than management consultancy, easier than the law or, indeed, politics, it will come back—but only then.

Guy Opperman: I thank colleagues who have contributed to the debate, in which there has been a cross-party optimism about the fundamentals of manufacturing. It is a noble profession and a wonderful sector to work in. There is optimism for the future of manufacturing, and that is what this debate is about, rather than the past.
	There has been an understanding of the past difficulties from which successive Governments and businesses down the years have suffered and of the present problems of globalisation, the Chinese influence, energy prices and the extent to which the state is struggling with the debt and difficulties faced by each country in the eurozone, particularly this one. There has been recognition that we must subsidise and support individual businesses and manufacturing organisations, whether with a form of capital allowances, R and D, tax credits or the like.
	Although there is a tradition for men to be involved in manufacturing, I was particularly heartened to hear my hon. Friend the Member for Erewash (Jessica Lee) contribute so robustly to the debate. As a female Member of Parliament, she spoke very eloquently of the role of women entrepreneurs. I strongly support the view that this is a profession not only for men but for women. I apologise to all women for saying, when I described the need for a Minister for manufacturing, that we needed a go-to guy; of course, it could just as well be a go-to woman.

Simon Burns: Or gal.

Guy Opperman: Or gal, as my right hon. Friend on the Front Bench so eloquently puts it. The learned Minister has intervened on many previous occasions, and we have another bon mot at last.
	I listened to the 19 speakers who contributed to the debate. We finished, last but by no means least, in Watford, having journeyed north to Morecambe and the bay, taken in Bradford East and Hove, and travelled back up to Yorkshire and Calder Valley and then on to Carlisle and Hartlepool. At this stage, the Minister appeared. I must apologise to him, because I think I said that he was from Bognor. Of course, I have nothing against Bognor—everyone loves Bognor—but he is the
	representative of Havant, as we all know, except the hon. Member for Hexham. We then journeyed to Erewash, Derby North, Pendle, Blaenau Gwent, Warwick, West Bromwich West, Burnley, Wolverhampton South East, Weaver Vale, and then to Huddersfield and up to the finest constituency of them all—which is, of course, Hexham.
	The future of manufacturing is worth our taking up the debating time of the Backbench Business Committee. The three co-sponsors of the debate—my hon. Friends the Members for Warwick and Leamington (Chris White) and for Burnley (Gordon Birtwistle) and the hon. Member for Huddersfield (Mr Sheerman)—have done so much to try to put manufacturing back in the frame in the House of Commons, and that is the right thing to do. It is noticeable that we are already receiving press coverage on the need for a Minister for manufacturing.
	There seems to be widespread agreement that the banking system needs reform and improvement so that these businesses, which we all so cherish and want to receive support, receive that support, whether it is from a local bank or an industry bank such as that championed so well by the Germans with the KfW model. Such possibilities give businesses an endless ability to thrive in future. We all agree that that is the model for the way ahead. I look forward to the forthcoming meeting with the FSA to discuss the local bank project. The Government should clearly be picking winners; manufacturing is a winner, and it has a very good future.
	Question put and agreed to
	Resolved,
	That this House has considered the matter of the future of manufacturing.

PETITION
	 — 
	Proposed Development on Coastal Road, Bolton-le-Sands (Lancashire)

David Morris: This petition is about the granting of planning permission to an unwanted development in Bolton-le-Sands. It is signed by 1,036 people.
	The petition states:
	The Petition of residents of Bolton-le-Sands and others,
	Declares that the Petitioners are opposed to planning application 10/00830/0UT, relating to a proposed development on Coastal Road, Bolton-le-Sands, as the Petitioners believe that there is no demand for any further development in the area as many properties are not fully occupied and many are already on the market; that there are insufficient employment opportunities in the area for any incoming inhabitants; that there is insufficient space in local schools for incoming children; that there will be increased pressure on what the Petitioners believe are already overstretched local NHS services; that the development will change the character of the area, with a detrimental impact on the landscape and residential amenities, including causing the loss of open spaces that enhance the quality of life of everyone in the area; that the development will cause a loss of grazing land and essential hedgerow habitats; that the development presents a risk to the canal and species in the canal ecosystem; that the development will result in the joining up of the villages of Bolton-le-Sands and Hest Bank and that there will be an increase in vehicular traffic on already busy roads, particularly on Coastal Road which has seen numerous accidents in recent years.
	The Petitioners therefore request that the House of Commons urges the Government to use any means possible to overturn the decision of Lancaster City Council to approve the development on Coastal Road, Bolton-le-Sands.
	And the Petitioners remain, etc.
	[P000986]

LOCAL PHARMACIES

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

Huw Irranca-Davies: May I thank you, Madam Deputy Speaker, and your good offices for granting this Adjournment debate on a subject that affects hundreds if not thousands of people right across the country in England, Wales, Scotland and Northern Ireland? I hope to encourage, support, prompt, cajole and beat the Minister—in a very nice way—to put some urgency into this matter, which I know he is aware of and is working on. I think that we need to do more. I can understand why this issue has not grabbed the headlines that other health-related issues have.
	A very wise MP once said to me, “Don’t go looking for issues. They will walk though your door.” That is exactly what happened. A female constituent came through my door about a year ago and said, unbelievably—it was unbelievable and I had some scepticism about it—that she could not get Femara, a cancer treatment drug. I said that that simply could not be the case because it is a readily available drug. It is not a drug that is not prescribed or that there is any shortage of. She left feeling a little disgruntled, but I agreed to take up the issue.
	I contacted the chemist, who said that my constituent was absolutely right. They said, “I cannot get hold of it in my own stocks, I cannot get hold of it locally by ringing other chemists and I cannot get hold of it from my regular distributors. I actually have to ring the manufacturer.” Even having done that, there was a delay before it was delivered, leaving somebody without their cancer treatment drugs. The implications of that are not only physical and medical, but emotional.
	Having looked into the matter further, it appears that this is a widespread concern. Like most people, I assumed that if a drug was a prescribed medication, it would be widely and freely available. I did not know about the systemic problem that we face in the UK in ensuring the supply of life-saving medicines. If one looks behind the façade of normality, one can see clearly the pressure on the pharmaceutical drug supply chain from manufacturers, through wholesales and distributors, to pharmacists and right down to individual patients.
	The Minister will be aware that today there are problems with about 50 products. Those medicines treat a wide range of conditions including cancer, Parkinson’s disease, schizophrenia, depression, asthma, diabetes and high blood pressure. All of those products seem to be in short supply due to the problem in the supply chain. In the midst of coming to terms with a serious medical condition, the last thing that I, the Minister, you, Madam Deputy Speaker, or anybody would want to face is the fear of not being able to receive their treatment or of having it interrupted because of a problem in obtaining the medicine. Yet that is the precise situation for too many people on a daily basis.
	It is our community pharmacists on the front line who see the overwhelming reality of this problem. I know that the Minister will recognise that when pharmacists cannot get hold of a drug for their patients, they work hard behind the scenes, under the calm waters, often in a Herculean effort, to ensure that nobody is left without their vital medicine. I have seen in my constituency the
	hoops that pharmacists are obliged to jump through to obtain medicines on such occasions. All too often, they have to ring round other pharmacists in the hope that they have the medicines available, spend time on the phone to the wholesaler or the manufacturer, or send faxes with copies of prescriptions to manufacturers in the desperate effort to find supplies on the day for their patients. On too many occasions, they are told that there is no stock available from the wholesaler or the manufacturer. Despite the time spent on that wild goose chase, pharmacists still try to provide the multitude of other services that the NHS and we ask of them.

Margot James: I congratulate the hon. Gentleman on securing this debate on such an important topic. Is he aware of the survey conducted as recently as this month by Lloyds Pharmacy of its pharmacists, which confirmed the point that he is making? It found that 50% of the pharmacists surveyed were spending between one and three hours a week trying to source medicines, and that 16% were spending between four and six hours a week doing so—almost a day of their working time.

Huw Irranca-Davies: Absolutely. The hon. Lady makes a very good point. I am aware of that survey, and I will touch on it. This is not a party political issue at all, it is very much cross-party, and I know she has a real interest in and specialist knowledge of the matter. We can help the Minister by suggesting to him some ways forward.
	The Lloyds survey to which the hon. Lady refers was of 400 pharmacists, and it showed that 80% of pharmacists were unable to dispense items, or had had to call their local GP surgery, for four or more prescriptions a week. For 26%, that number rose to more than 10 prescriptions a week. On average, half of pharmacists surveyed were spending at least one to three hours a week trying to resolve stock availability problems for patients. That includes ringing around other stores, contacting suppliers and liaising with prescribers. Critically, as she said, 16% spend at least four to six hours a week doing so, and 8% spend more than six hours a week chasing down stock.
	Another survey that has been undertaken, of which the House may not be aware, is a 2011 preliminary survey on medicine supply shortages by Chemist and Druggist online. It found, echoing those earlier findings, that 93% of respondents were spending more than one hour a week sourcing key medicines. It found that 54% were spending more than two hours a week doing so, and that 10% were spending five hours or more. If they are doing that, they are not providing the front-of-counter services that we want them to, such as helping people with minor ailments and providing other assistance. That survey also found that 90% had had to ask GPs to change a prescription in the face of shortages, and that 70% had found getting hold of branded medicines even harder in the past year than in previous years. Those figures mirror those in the previous survey the year before. The problem is at least as bad as it was a year ago, and possibly getting worse.
	Let me personalise the matter. I spoke to a community pharmacist from Rasharkin in Northern Ireland this week, who told me:
	“Supply chain issues are becoming an increasing problem as I continually have to telephone the manufacturer directly for stock. For example today”—
	Monday 21 November—
	“we had four prescriptions outstanding for a drug for depression; we had ordered these electronically through the manufacturer’s chosen supplier five days ago but the stock has still not arrived. We had to telephone the manufacturer for stock today and they insisted we supply copies of the prescriptions. I refused as I believe there are issues here with patient confidentiality. They agreed to send only a partial order. Two of the above patients will be without their medication until the supply arrives, the other two have enough to keep them going for a few days.”
	Patients in that situation are all too often left with only a small supply, and sometimes with none of the medicines that they need. Research by the Patients Association found that half of those surveyed had had to wait two or more days to get their medication when there were stock availability problems, and that two thirds felt from their personal experiences that medicine shortages were definitely having an impact on people’s health. That situation will see real harm caused.
	The Chemist and Druggist 2011 survey has already found tangible incidents of harm caused to patients by a lack of available medicines. To cite some examples, it found incidents of a pharmacist having to refer a patient back to hospital because of a shortage of drug supply; patients describing themselves as “stressed and upset”, and suffering severe emotional trauma; a patient experiencing difficulties with anxiety that had previously been controlled by their medication; and a diabetic patient suffering a hyperglycaemic episode while waiting for their medication.
	The evidence showing the problems in the supply of medicines to local pharmacists is clearly overwhelming. The reality for patients, including the one who came through my door a year ago, is frightening. Despite the hard work of pharmacists everywhere, the results could be fatal. We must avoid that. The situation was noted by the all-party group on pharmacy this week when it announced that it will hold a full-scale inquiry into the continuing problem of shortages in NHS medicines.
	The reasons for the shortage in the supply of such crucial medicines, as in any situation, are varied. First, as the Minister will know, European competition policy promotes a free market in medicines. The trade is legal and encouraged by the EU. With the weak pound, there is money to be made—by pharmacists, wholesalers and others—by selling drugs to those in Europe.
	The Association of the British Pharmaceutical Industry states that the recent Medicines and Healthcare products Regulatory Agency announcement that it will repeal section (10)(7) of the Medicines Act 1968 to prevent pharmacists from trading without a wholesale licence is an important step in the right direction, but it will not solve the problem. Experience has shown that supply in the market well beyond what is needed for UK patients does not solve the problem of shortages at pharmacy level —it simply results in more stock being diverted overseas.
	The second reason is the number of wholesalers. There are now 1,800 wholesale dealer licences in the UK. Additionally, according to the British Association of Pharmaceutical Wholesalers, six years ago, a pharmacist could order from their chosen wholesaler almost any medicine manufactured, but nowadays, they need to order from at least two or three wholesalers, which means two or three deliveries at different times of the day, with two or three times the paperwork.
	Thirdly, quotas put in place by manufacturers to control demand are crude and lack the flexibility to meet ordinary fluctuations in demand. In one case, a pharmacy was restricted by a quota to 28 days of supply for a medicine, meaning that it was unable to fulfil 56-day prescriptions. To overcome such situations, pharmacists must place so-called emergency orders directly with the manufacturers for stock to be delivered individually in unscheduled deliveries, which often arrive via courier companies one or two days after the identified patient need.
	Increasingly, patients are forced to wait while the pharmacists make daily emergency orders with various manufacturers. They often have to go through quite intrusive audit questions to prove they have a genuine patient need. On top of that, the patient has to await delivery. Another pharmacist—from Gwynedd—said of this unacceptable situation:
	“In many instances after phoning our wholesalers and the manufacturers and even…specialist wholesalers, we are eventually able to source the drug, but it doesn’t arrive for 2 to 3 days.”
	In March 2010, the then Secretary of State, my right hon. Friend the Member for Leigh (Andy Burnham), held a summit meeting of all industry stakeholders and formulated an action plan. In February 2011, the Department of Health published guidance, but as we approach 2012, a solution is still not in sight, unless the Minister brings some clarity today. The guidance is a step in the right direction, as recognised by Pharmacy Voice, but it is not the silver bullet—there is no silver bullet. Problems remain and it is time for further affective action to be taken.
	What should that action be? We should update the regulations on patient access to medicines to make them fit for purpose. Currently, there is a duty to supply, but no time scale in which to do so within the UK. In other EU nations, including Belgium, France, Finland, Germany, Greece, Hungary, Italy, Norway, Portugal and Spain, have implemented a patient or public service obligation—I prefer the phrase “patient service obligation—on the manufacturers and wholesalers to ensure that community pharmacists can get medicines to their patients when and where they are needed. It is time for the UK to implement its own, albeit adapted, version of a patient service obligation. The Minister might be hesitant to do that, but we place obligations on distribution network operators to connect people to the national grid to ensure that they receive an uninterrupted supply of electricity, and yet we have no obligations on an uninterrupted supply of medicines.
	There are different ideas on what would constitute a patient service obligation, but let me suggest some principles that might underpin one. First, all those who supply medicines, whether manufacturers, distributors or dispensers, should have a duty to ensure that the medicine supply chain is economically efficient in line with the clinical needs of patients, so it delivers to them on time. Secondly, all those who supply medicines should have a duty to ensure that patients can easily and quickly obtain the medicines they need and to prioritise the supply of medicines to UK patients. Thirdly, medicine supply arrangements must be sufficiently robust and stable to guarantee a continuous supply to patients, including the rigour needed to absorb any short-term disruption—for example, through extreme weather conditions, as we saw last year.
	Such a patient service obligation would receive support across the supply chain from manufacturers, wholesalers, pharmacists and patients. The National Pharmacy Association and the British Association of Pharmaceutical Wholesalers are already on board, and the Association of the British Pharmaceutical Industry is keen to learn more. Indeed, the Government have not ruled out a patient service obligation. I see no reason why active discussions between all interested parties—the manufacturers, wholesalers, pharmacies and patients associations —cannot begin immediately, brokered by the Minister and the Department of Health. Perhaps the Minister would like to know that a recent Pharmacy Voice survey has shown that such a move would find considerable favour with the public.
	It is time for the Department of Health to lead on this vital issue. The evidence is overwhelming and the urgency palpable. Everyone is ready to find a solution and ensure that the aims of a patient service obligation—ensuring that no one goes without their vital medicines—are more than just an ambition, and become a reality. I hope the Minister in his response—I know that he is aware of the criticality of this issue—can assure the House of his intention to act on this issue with real urgency.

Simon Burns: May I begin by congratulating the hon. Member for Ogmore (Huw Irranca-Davies) on securing this debate? I know that he has been assiduous in highlighting this important issue in his constituency and beyond, and anyone who doubts that need only have listened to his speech—or can read it in Hansard tomorrow—to know his commitment to, knowledge of and passion for this issue of genuine concern in many areas. It is also a pleasure to see my hon. Friend the Member for Stourbridge (Margot James) in her place, as I know that she has a long-standing interest in the subject, having secured a debate on the pharmaceutical situation earlier in this Session.
	I assure all hon. Members that I am sadly all too aware of the difficulties that pharmacists and members of the public have had in obtaining some prescription medicines. It was particularly moving when the hon. Gentleman spoke of the experience of someone he knows who regrettably had trouble getting hold of one of her medicines, Femara, which is used to treat breast cancer. We freely discuss policy at meetings and in the Chamber, but those discussions suddenly seem very distant when we are confronted with the reality of what it means to be unable to access a drug. I am aware that some pharmacists have had difficulties getting Femara, but those difficulties have recently been greatly reduced following the expiry of the patent earlier this year. The generic version of Femara is now widely available under the name letrozole. I know that it is of little consolation to the hon. Gentleman’s friend, but what it does mean is that other people will not have to go through the same heartache as that lady.
	I am also aware of how frustrating it is when such problems occur with other drugs—not simply cancer drugs—because for people who need them at the time, they are equally important. The coalition Government have already taken action and we will take further action if necessary.
	Supplying medicines to patients requires a complex, international infrastructure. There are around 16,000 licensed medicines covering tablets, capsules and injections, and different dosages, and nearly 900 million NHS prescription items are dispensed every single year. As hon. Members will appreciate, it is a vast undertaking. Given that complexity and scale, there are difficulties from time to time, and not only the UK is affected: recently the US has had problems of its own. There are many different reasons why patients might have problems getting hold of their medicines, and they range from difficulties in obtaining raw materials to manufacturing problems and the overseas sale of medicines intended for this country. I would like to speak about all of these.
	Supply issues can arise as a result of parallel trade, as the hon. Gentleman mentioned. That is when medicines are bought at low prices in one European country and then resold at higher prices in another. When the euro got stronger relative to the pound, exporting UK medicines to other European countries become more profitable. At the moment, parallel trade exports are therefore reducing the supply of medicine available to UK patients. I stress that this parallel exporting is legal and can be carried out by anyone who holds the necessary licences under the medicines legislation. Indeed, in the past, UK patients have benefited from medicines being imported to this country by the same process.
	I cannot stress firmly enough that there are existing legal duties on manufacturers and distributors, within the limits of their responsibilities, to maintain a suitable supply of medicines to pharmacies so that the needs of patients are met, but regrettably a minority of operators in the supply chain are thought to be putting profit before patients. I know that this is not condoned by the majority of the supply chain. Indeed, manufacturers and pharmacies have to fill the gap that these practices create.
	Manufacturers have introduced quotas to try to target supply but this reduces pharmacies’ flexibility to meet unexpected patient need. Pharmacies use contingency arrangements to get medicines directly from the manufacturer rather than from their usual wholesaler. We have recognised this in NHS funding for community pharmacies but it still annoys the majority that are putting patients first. I understand that that is frustrating for many parts of the supply chain and can lead to delays in some patients getting their medicines. However, the Department of Health, the Medicines and Healthcare products Regulatory Agency and the supply chain stakeholders—manufacturers, wholesalers and pharmacies —are working together to reduce the impact on patients.
	In order to address the issues with supply, the previous Government set up a ministerial summit in March 2010. A wide range of organisations and individuals participated, including those representing pharmacists, wholesalers and doctors. The summit agreed a package of tough actions to be taken forward in collaboration with the industry and other partners. This Government have taken forward many of the actions proposed by the previous Government. We continue to work with all parts of the supply chain to make sure it functions as well as possible through collaboration and collective agreement rather than by increasing the regulatory burden.
	Actions taken forward following the summit include: publishing updated guidance on the legal and ethical obligations placed on manufacturers, wholesalers, registered
	pharmacies and others involved in the supply and trading of medicines in December 2010; publishing best practice guidance agreed by stakeholders of the supply chain clearly stating that under normal circumstances pharmacies should receive requested medicines within 24 hours—if all members of the supply chain followed this, patients might get medicines more quickly—and developing and maintaining a list of products in short supply published on the Pharmaceutical Services Negotiating Committee’s website so that no one trading in these products can say that they are not aware of supply difficulties.
	On top of that, MHRA site inspections and follow-up inspections have been conducted and progress has been made, including through written undertakings to comply with the agency’s recommendations. To date, no breaches of the regulation have been established.

Huw Irranca-Davies: This is not a new phenomenon. As the Minister said, the previous Government recognised it, set up the taskforce and introduced proposals on which this Government are acting. The difficulty is that the system is not working properly, despite the best will in the world. I understand the one in, one out rule and the necessity to avoid an undue regulatory burden, but a light-touch approach would be welcomed by most of the industry. A manufacturer told me the other day that he was producing 140% of the needs of the UK but there was still a shortage of the drug that he was supplying. Surely a patient service obligation would fit the bill by ensuring that certain things have to happen. It has been done in most other European countries.

Simon Burns: I am grateful to the hon. Gentleman, and I will come to that point a little later in my remarks.
	As I was saying, exporting medicines is only one source of supply difficulties. Problems such as obtaining raw materials or problems with manufacturing processes can also cause supply problems. The increasing concentration of pharmaceutical manufacturing has made the situation worse. A medicine may be made only in one or two sites globally, which means that there is not much flexibility if problems are experienced at a particular factory or manufacturing site. Production schedules have to be planned months in advance and if one company has a shortfall, suppliers of alternatives may be unable to make up the shortfall at short notice.
	The current trend in the supply chain of pharmaceuticals over the past few years is to move towards a “just in time” set-up, which results in lower stocks of medicines throughout all parts of the supply chain. This trend has resulted in significant savings, but requires more active and reactive stock management. Again, the Government work closely with pharmaceutical companies, wholesalers, pharmacists and the NHS and have well-established procedures to manage these risks.
	The Department of Health published joint best practice guidelines with the Association of the British Pharmaceutical Industry and the British Generic Manufacturers Association in January 2007. The guidance gives companies advice on what to do in the event of a shortage and recommends early communication with the Department about possible shortages that might
	affect patient care. This allows us to work together to explore whether any action can be taken to reduce the impact on patients.
	The Department has also created a small buffer stock of some medicines to help manage shortages during pandemics and other emergencies. We are also taking action through the European Commission’s falsified medicines directive to strengthen the supply chain against the risk of counterfeit medicines. This aims to improve the reliability of the medicines supply chain and to respond to the increasing threat of falsified medicines entering it.
	As a direct result of the arrangements I have described, combined with the diligence and professionalism of the majority of the supply chain, patients overwhelmingly have access to the right medicines in a timely and efficient manner. We are continuing to monitor the situation very closely. Of course, we are not prepared to be complacent. That is why we are working so closely and collaboratively with the supply chain, monitoring and intervening as appropriate.
	The hon. Gentleman’s intervention was about the public service obligation. I am aware that some—like him, and quite honourably—would prefer to see a public service obligation placed on the medicines supply chain to maintain supplies of medicines. As I have said, it is already the case that manufacturers and distributors must ensure continuous supplies of medicines to meet patients’ needs. Failure to do so could put them at risk of regulatory action or criminal prosecution.
	Some other EU member states have a very precise definition of how soon medicines should be received, but we are cautious about going down that road. It would vastly increase regulation on the industry and drive up costs across the board. This is why, as I have said, we have chosen to go down the route of best practice guidance instead. Best practice arrangements exist; they have been agreed with all parts of the supply chain and they have been very successful in minimising the impact of shortages. It is a much more flexible approach in comparison with statutory regulation.
	In conclusion, I am grateful to the hon. Gentleman for raising this issue—one that will be relevant to all Members across all party divides, as well as to every single community and individual person. It is an issue of true universal interest and concern. I assure the hon. Gentleman that the coalition Government are absolutely committed to patients getting their medicines as quickly as possible. We are also certain that in the supply of medicines, everyone in the supply chain has their part to play, including manufacturers, wholesalers, pharmacists, prescribers and patients. The Government will continue to work closely with all those involved in the supply chain, making sure patients receive their medicines in a timely manner and without any unnecessary complications. This is not an issue that will be discussed just once and then forgotten. We are determined to keep a watchful eye on the situation to see if there are ways to improve it and minimise disruptions or problems for patients, ensuring that they get the best service to which they are entitled.
	Question put and agreed to.
	House adjourned.